12 August 2010

In addition to it, the spread between discounted 5-year fixed and variable rates has decreased over 110 bps (1.1%). And, of course, it reduced the variable-rate advantage.  
Practically, fixed and variable rates can be once again almost equally profitable in case of 5-year term. That’s if the rate increase forecasts of major economists are true (up 2.00-2.50% in the next 18-24 months).
In such a situation the 5-year fixed can be not the only term benefiting from the yields change.  There’s also great value in 1- and 3-year terms. For example, today’s market best 3 year fixed is 2.90%! That’s why it’s necessary to consult your mortgage broker in order to find out what term is a better suit for you.

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