Hi all,
I would like to hear your opionion and advice about decision to fix mortgage during this period.
Situation: contract signed, downpayment done. Apartment still in construction and expected to be released November 2023.
The mortgage consultant called me last week, to inform about the need to start thinking about fixing the rate as he expects the rates going up more.
Since then, I start monitoring the rates of 7 banks (just bookmarked the web-page where % rates are published).
What I understood, is that whatever interest is published, this is only indicative as many faction could influence the real rate a bank will offer (e.g. date of mortgage start, place, affordability etc. etc.) - however, this practice helps me to keep a close eye to the evolution of the rates.
As we speak, the delta between 5-7-10 years period, is very close (e.g. 0.1 - 0.25). The financial institute I am currently in, based on last Friday’s rates, offers respectively 3.11 / 3.10 / 3.12
Just a week ago, same was offering 2.83 / 2.86 / 2.92. This raise could be a direct effect of the recent decision from SNB, I guess.
Now, given nobody has a crystal ball, it’s basically about betting. But at least, I would like to ask around if someone more into the topic, could provide useful insights, or even a different PoV.
My idea is not to be in a hurry now to fix the rate (yes, they can go still up, but my feeling we’re now at the peak). I am thinking to still monitor the market for some weeks and then evaluate.
Fixing the rate now, with my current institute, will mean no easy-way out. I was also evaluating the option to go with another bank, should a better offer would come, but as of now between banks, difference is very little (e.g. 0.1 - 0.15 %), which can be easily absorbed by the penalty the bank will ask, and the additional costs to the notary.
Months ago, when I started to evaluate the mortgage (when interests were around 1.5%) , I was tending to consider a 10-year 1-only block fix rate.
Now, despite I still consider to have 1-only block and do not split (to avoid continous lock-in with the bank), I reconsidering to scale down the period to 5 years. Why? Just gut feeling: maybe in 5 years rates could shrink a bit (but also the way round) and at the time of the re-negotiation I could bring some money in to request afterwards a smaller amount.
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Would you advise to block rates ASAP, or still monitoring the trend in the next period?
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Which period would you consider as ideal, given the today’s condition, 5-7-10 (or differently)? Would considering a combination of fix and SARON an alternative approach?
Many thanks for your time
Best,
Cappuccio