Short term and variable mortgage rates are either flat or falling while longer term mortgage rates are rising. This has turned the mortgage market on its head so that now variable rates are cheaper than fixed rates. This 'steepness' of the mortgage rate curve is increasing and forcing home owners to decide whether variable is better than fixed. One option is to hedge your bets by having half fixed and half floating.

See here for an interactive chart on the steepness of the mortgage rates curve.

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6 Comments

by Wally | 18 Nov 09, 2:58pm

Keep an eye on the

Keep an eye on the Japanese govt bond issue costs. I'm told rates are rising. That's important. Might mean the end of the carry trade in Yen. likely to lead to higher priced fixed term loot in the land with the housing bubble economy.

by Mortgage loan Rates | 18 Nov 09, 5:46pm

A mortgage is usually secured

A mortgage is usually secured by the real property being purchased and sometimes through personal property

by ruru | 18 Nov 09, 6:32pm

SPAM SPAM SPAM above

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by Alex Tarrant | 19 Nov 09, 6:22am

Thanks ruru, it's gone now

by Paul van Dinther | 19 Nov 09, 1:57pm

Fix it. I fixed 75%

Fix it. I fixed 75% of it almost a year ago when everybody told me not to at 6.5% for 4 years. For that same term you now pay 8.5%

I think variable rates will snap up suddenly and then there will be a run on fixed rates that will shoot up even faster.

Staying on variable rates is a dangerous cat and mouse game that is bound to bite you in the ass because those rates are about as low as they will go.