best fixed rates - investment, page-12

Redmond, not sure if you real understand how the mortgage market in the US works and the reaosns for their rates but here is an attempt.

Firstly, most of the funding for mortgages is from mortgage back securities (one of the main reasons for toxicity existing). So not from bank deposits as in australia where the cost is based on the RBA rate.

US use a FICO scoring system which measures everything about you incluidng if the property you are buying is effected by foreclousres. The score then determines the premuim to be charged. Given the financial debacle in property in the US, the premium is high.

In the US, a loan over 300K or 400k is actually a large loan and the availabilty is restricted making financing overall a lot more expensive. But again Redmond, using raw data with out understanding why to support your arguements is another example of many perma renters trying so hard to create even more fear.

Not sure how Kicella gets the 3-4% rates, but on tuesday rates will be pushed down by another 1% to around 5%. Hopefully fixed rates will follow and a further rate cut in March 2009 in response to the weakening of the economy should bring the variable rates to 4%.

Those people with money in the bank wont be happy as they wont be earning much interest at all. seems a transfer of wealth to perma renters with deposits to those with mortgages.