Long Term Mortgages Hit Bottom and are on the way up

by RSingh 4. May 2009 03:28

Long term mortgages have hit the bottom and are likely to increase as bond rates have headed higher and are above 2% mark. The bond rates is the key factor that determines the long term interest rates as many lenders price their mortgages based on the bond rates.

Typical pricing is 1.5 – 2% above the bond rates, with the 5yr bond trading on May 1, 2009 at 2.02 and had been increasing from a low of 1.85%, there is pressure to raise interest rates.

The bond market reacts to the economic news and typically positive news will trigger the bond rates to go up and negative news will do the opposite.  This being said, there is not that much positive news in the financial markets and with the Swine Flu pandemic problem, this will definitely affect the financial markets.  

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About the author

Roy Singh is a Real Estate and a Mortgage Broker with over 17 years experience. He was instrumental in building the largest Mortgage Brokerage in Canada and has developed many programs to allow First Time Home Buyers to enter into the Real Estate Business.

Roy currently is the Broker of Record for both CENTURY 21 Home Realty Inc. and CENTUM Discount Mortgage Canada Inc.

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