As what concern the people there are two main questions that everybody put himself:
- What will happen with the mortgage load
- What will happened with the jobs
In this post, we try to answer at the first question.
It is a reality that the interest rates are at the lowest historical level.
In the next picture, we show a history of the rates for open and close loan.
Source http://www.canequity.com/mortgage_rate_history.stm
Let make an historical analyze.
In august 2002, as in November 2004 have begun 2 periods of “flat panel” which have stay about 9 months. (Square grills represent 6 months). We are now in a same situation. This time the flat begun in October 2010 and we presume that it will be the same length 9 months.
However, attention, we are speaking about variable rate!
What this data mean?
That mean the interest for mortgage loan will switch soon!
Our prediction is that in the summer 2011, the fix 5 years (from which we deduct 1.5%, the usual discount gave by the banks) will be the same as the variable shown by the banks. We did not deduct from variable because this is usual fluctuation +, - 0.8.
The conclusion!
The variable will rise soon! If you have fix, do not switch now!
It will be a tough period for the mortgage with variable rate!
In addition, the analyze show that in this inversion will be about 7-8 months, that mean until spring 2012.
We hope that this technical analyze will help the people to the right decision concerning their mortgage loan.
We come soon with new analyze which will help to predict the future.
