4 ms·

Mortgage Rates Hit 5.89%, Highest Level Since 2008

5 points by tempsy 4y ago

Flatcircle 4y ago
Perhaps because rates were so low for so long, we’re due for the pendulum to swing the other way? Could get ugly if the rates go up to 8 or higher.
- nh23423fefe 4y ago
  why would prior lowness explain present values better than present demand would? is the temperature in summer driven by the coldness of winter?
  - Flatcircle 4y ago
    https://www.amazon.com/History-Interest-Rates-Fourth-Finance/dp/0471732834/ref=mp_s_a_1_1?crid=ACS9NX1CKFRW&keywords=history+of+interest+rates&qid=1662653312&sprefix=history+of+int%2Caps%2C135&sr=8-1 https://www.amazon.com/History-Interest-Rates-Fourth-Finance... Read this book to find out
moistly 4y ago
I have read that Americans have access to 30yr fixed rate mortgages. Is that a full 30 years at the same rate, or is it, say, 5 years at the initial rate, and then you negotiate the next 5 year rate? The latter is how it works in Canada: 30 years to pay it off, but the rate is guaranteed for a much, much shorter period. ‘Cause if it’s the former, all y’all were nuts not to lock in a 30yr loan. Virtually any investment would pay better than the interest on the loan. Especially on a 30yr timeline.
- jfengel 4y ago
  Yeah, 30 year fixed mortgages are pretty common in the US. They're generally a bit higher than the equivalent variable rate. And yes, they've been practically giving money away for so long that anybody needing a mortgage should have locked that rate in. I suspect many didn't because at any given point, the variable rate loan will be cheaper. And with loan rates that low, re-financing would be a hassle without a clear short-term benefit. And that held up for well over a decade. One saving grace: most variable mortgages are limited in how much they can go up (or down) in any year. So it will take a few years before they go up to their maximum potential rate. I'm not sure what mortgage rates will do between now and then. I'd love to see this as a temporary pendulum swing, but the "temporary" free money era lasted way long than I would ever have imagined.

5 points by tempsy 4y ago

Perhaps because rates were so low for so long, we’re due for the pendulum to swing the other way? Could get ugly if the rates go up to 8 or higher.

nh23423fefe 4y ago
why would prior lowness explain present values better than present demand would? is the temperature in summer driven by the coldness of winter?
- Flatcircle 4y ago
  https://www.amazon.com/History-Interest-Rates-Fourth-Finance/dp/0471732834/ref=mp_s_a_1_1?crid=ACS9NX1CKFRW&keywords=history+of+interest+rates&qid=1662653312&sprefix=history+of+int%2Caps%2C135&sr=8-1 https://www.amazon.com/History-Interest-Rates-Fourth-Finance... Read this book to find out

moistly 4y ago

I have read that Americans have access to 30yr fixed rate mortgages. Is that a full 30 years at the same rate, or is it, say, 5 years at the initial rate, and then you negotiate the next 5 year rate? The latter is how it works in Canada: 30 years to pay it off, but the rate is guaranteed for a much, much shorter period. ‘Cause if it’s the former, all y’all were nuts not to lock in a 30yr loan. Virtually any investment would pay better than the interest on the loan. Especially on a 30yr timeline.

jfengel 4y ago
Yeah, 30 year fixed mortgages are pretty common in the US. They're generally a bit higher than the equivalent variable rate. And yes, they've been practically giving money away for so long that anybody needing a mortgage should have locked that rate in. I suspect many didn't because at any given point, the variable rate loan will be cheaper. And with loan rates that low, re-financing would be a hassle without a clear short-term benefit. And that held up for well over a decade. One saving grace: most variable mortgages are limited in how much they can go up (or down) in any year. So it will take a few years before they go up to their maximum potential rate. I'm not sure what mortgage rates will do between now and then. I'd love to see this as a temporary pendulum swing, but the "temporary" free money era lasted way long than I would ever have imagined.