# Interest Rates



## Long Nose (Jan 29, 2009)

On Tuesday I did another refinance on my mortgage.  This will break even in 4 years, but save $43,000 over the life of the 30 yr fixed loan.  Of course that requires me to stay in the house that long.

So I've gotten a 4.375% Rate with 1.875 points 30 yr fixed.  I am curious if that translates across the puddle.  If so, what kinds of rates are available in your countries?


----------



## shadow12345 (Jan 29, 2009)

getting a fixed rate for that long would be very tough here... im not even sure you can extend to 30 years as most of ours are 25 year to start with.

You can do 5 - 10 years fixed as an average you can get 8 years for 2.99%


----------



## Long Nose (Jan 29, 2009)

Interesting, for the first time ever I've seen terms here advertised for 40 years.  Yes there are also 15 year terms, but a vast majority seem to be 30 year.  For many of these fixed types there are no prepayment penalties, so you can turn a 30 year into anything you want.


----------



## shadow12345 (Jan 29, 2009)

Most of the 10 year rates will allow overpayments but not until 5 years into the term


----------



## schielrn (Jan 29, 2009)

I have actually seen 50-year mortgages offered recently to my surprise. I don't know why people would do it, but I guess maybe with the uncertain economy and with no pre-payment penalties it might not be a bad idea if the rate was right, but I just recently bought a house and got 5% with no points for 30 years.

http://www.bankrate.com/brm/news/mortgages/20060427a1.asp


----------



## Long Nose (Jan 29, 2009)

If you can only get 10 years fixed, then doesn't that price you out of many potential home buys?  Or is there a longer term available with different terms?  Like the 25 yr, how does that work?

5% with 0 pts is a good rate.  Contrats.  50 year?  Wow.


----------



## Domski (Jan 29, 2009)

I remember Standard Life offering a 25 year fixed rate in the UK about 7 years ago when I was first looking but the rate wasn't fantastic and I think that is quite unusual over here.

At the monent I pay about 4.5% on a variable rate mortgage after my 5 year fixed rate ran out about 18 months ago. I was keen to get on to another fixed deal at the time but dragged my feet so long that the crunch startef to hit and the deals vanished pretty quick but as it turned out it was the best thing that could have happened.

I'm waiting until I get back off my hols at the end of Feb and then I'm going to assess my finances and see what is out there. I'm lucky in that even with the price drops I reckon I still have way over 50% equity so should be able to leverage something pretty good.


----------



## shadow12345 (Jan 29, 2009)

no you can still get a longer term but it becomes variable after the fixed rate term of 10 years


----------



## arkusM (Jan 29, 2009)

In Canada generally you get a 25 yr mortgage (though there are other options).
Then they have the interest clause that is renegotiated every 5 or so years. 
For example my rate at the moment is prime mortgage rate less .75 points. But that rate was only offered to me for five years after that they renew with a new rate. (and I doubt that I will get sub mortgage rate again). Cynically it seems to be a way for the banks to ensure they get their pound of flesh plus some extra! As if the coumpounding interest was not enough.

There are a lot of products out there, 40-50 yrs 0-down, interest only etc. But like I said commonly the interest rates are only for 5 yr terms. 

As far as I know and I will defer to someone in that business.

A 30yr fixed sure helps with the budgeting!

EDIT: Longnose I just realised that you are in the USofA... feeling dumb... I still find it interesting that you can get a 30yr fixed rate...
I guess the US way and the CND way are fairly different.


----------



## Long Nose (Jan 29, 2009)

Domski said:


> I'm lucky in that even with the price drops I reckon I still have way over 50% equity so should be able to leverage something pretty good.



You are in a great position.  I'm just under 50% which is amazing, when only eight years ago I had to take a second loan (80/20) just to get a loan to cover 80% of my home.  There was a sweet spot for home buyers several years ago, who saw their asset values rise off the charts.  

Who knows whether we'll ever see that happen again.


----------



## riaz (Jan 29, 2009)

Here in Luxembourg, I can see housing loans being offered at 3.2% but I can't tell if they are fixed long term, or variable with some sort of notice.  If anyone is interested, I could find out.  I suppose one could shop around, but as I am no longer in that market (mortgage nearly paid off, thank goodness), I am not following it avidly.

There also appears to be an option to elect a balloon payment, so you pay interest and principal on the normal portion, interest only on the balloon portion, and make a final payment.  Loans are still being offered for up to 30 years, but of course it depends on your age.  Normally, you are expected to pay off the loan at the latest by the time you are 57 - odd figure for some reason.  So unless you are 27 or less, I doubt if you could get a 30 year loan, but hey, 29 or 28 would also do.

Long ago (and once again, of no interest to me as kids have flown the coop), you used to get a subsidy of 1% on your interest rate per child that you supported, so at one stage, I had an interest rate of 2.5%, less 2% for two kids, so I was effectively paying 0.5%, on which you could claim tax relief.  I know the tax relief is still there (with a cap though), and some sort of child subsidy still exists, but I do not think it is a full 1% rebate any more.


----------



## Long Nose (Jan 29, 2009)

Nice country Luxembourg, I've only been there once (1991).  I drove my cousins Audi like the banshees from Strasbourg to the Autobahn and then through to Luxembourg.  

Mind you, I was still spending most my time in the right hand lane and being passed by 911's most the way.

I like the child credit idea especially with three dependents.  Did you experience the recent credit freeze?


----------



## SydneyGeek (Jan 29, 2009)

In Australia, 6% is typical now. You can fix, but you can't pay early on fixed. You can get up to 30 years. 
This is ballpark, there are heaps of exceptions. 

Denis


----------



## riaz (Jan 31, 2009)

Long Nose said:


> Did you experience the recent credit freeze?



It is beginning to filter through now, not so much a credit freeze as people beginning to be careful with their money.  About the only places where people are spending money seems to be supermarkets.  We usually have an annual car festival in February and banks throw money at you to try and tempt you to buy cars.  Well the festival is on, banks are throwing money at you, car dealers are knocking prices down like crazy, and still people seem to be reluctant.

I think the driving thought in most people's minds, finally, is that if you borrow, you have to pay it back one day.


----------



## SydneyGeek (Jan 31, 2009)

> I think the driving thought in most people's minds, finally, is that if you borrow, you have to pay it back one day.


...Which seems to have been one of the causes of the mortgage problems in the US. You don't have to pay it back if you default.

Denis


----------

