My 2010 Mortgage Interest Rate Predictions and Forecast

Personally, I think that homeowners looking into refinancing should make the move soon. Right now, mortgage interest rates are at near all time lows, and do not seem to be getting any lower. However, there is still a little time before I predict mortgage rates increase. Here are my mortgage interest rate predictions for 2010.

Right now, mortgage rates have been hovering around the 5.19% mark for a typical fixed rate 30 year home loan. However, with rates being that low, and with millions of homeowners a;ready getting help from the Obama stimulus plan, interest rates are bound to go up. While the housing market is not showing signs of turning around for the better any time soon, it is not getting worse either. This is because a lot of the struggling homeowners have taken advantage of new refinancing options and Government bailout plans. Homeowners who still had decent credit, but knew something needed to change, got into a much lower interest rate on their own before the economy went horrible.

With that in mind, here are my mortgage interest rate predictions for 2010. I think that homeowners who wait to refinance for too long will be in for a shock that interest rates have increased. I think that around April 2010, mortgage rates will jump up to around 6.15%. this sounds minimal, only 1% or so, but in reality, that 1% is the difference for many people between saving a lot of money, and not benefiting at all from a refinance. I think that the rates will rise because they can not get lower, and the housing market will improve in the coming months. With the housing market improving, the entire economy will benefit. With that, money will be flowing again, and rates will rise accordingly. Also, by April of 2010, many homeowners who were in the worst shape will have gotten relief from Government provided programs designed to aid homeowners at risk of losing their home.

Homeowners need to take advantage of the low interest rates available today and take action. While predicting mortgage rates is not entirely accurate, there are many good indications, some of which I have included here, that point to a rate increase sometime in the near future. Refinance or get into a better more favorable mortgage now while rates are low and lenders and banks are looking for more customers.

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10 Year Treasury Rate Helps With the Mortgage Rates Forecast

The 10 year treasury rate is a strong predictor of mortgage rates. The correlation of the 10 year to the 30 year fixed mortgage is over quite strong. If you look at a graph of the two indicators together, you will see that over 90% of the time they move together. With this knowledge, it makes it much easier to give a solid mortgage rates forecast.

Since the beginning of 2009, the 10 year has been in a steady uptrend from 2% all the way to 4%. There was a very strong resistance at 4% and the 10 year rate has pulled all the way back down to 3.5%. It would not be surprising to see it fall back down to the 3.25% before we see the uptrend find any ground again. The government is trying very hard to make sure that interest rates get to 4.5% but it seems that they might not have enough power to push the 10 year low enough to pull mortgage rates that low.

It will be very interesting to see how Obama and Benanke attack this issue as mortgage rate are going to have to be extremely low to get the housing market back in gear. If the low rates of March and April did not help to put a bottom in the housing market, there is absolutely no way that the rates of today, around 5.4%, are going to assist at all. Americans are already concerned enough about the housing market, the last thing we need to see if rates pushing towards 6%. Overall, making a mortgage rates forecast is going to be tough, but watching the 10 year treasury rate might help out.

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Toronto Mortgage Rate and Housing Forecast 2008

The Canadian Mortgage and Housing Corporation (CMHC) has reported in their latest Great Toronto Housing Association Market Outlook that posted mortgage rates eased by about 50 basis points in the first four months of this year, although rates in late April were 30 to 35 basis points higher than they were 12 months prior. Mortgage rates are expected to trend marginally lower throughout 2008, but will be within 25-50 basis points of their current levels.

For 2009, posted mortgage rates will begin to drift up slightly as the year progresses. For 2008 and 2009, the one-year posted mortgage rate is forecast to be in the 6.50- 7.50 per cent range, while three and five-year posted mortgage rates are forecast to be in the 6.75-7.50 per cent range.

Interestingly, the CMHC also believes that after first time buyers saw a huge uplift in 2007, as almost 60% of home buyers were upgrading from rental accomdation, these buyers will drop throughout 2008 and in 2009. As first time buyers continue to find it tough to get on the property ladder, all the way through 2009, we will also see the continued trend in the Canadian mortgage market towards new products such as the 40 year amortization period and in some cases the 100% mortgage, coupled with less-expensive housing types such as the numerous new build condos in the downtown core.

CMHC Toronto housing market & Toronto mortgage rate forecast

City Year Total Housing MLS sales MLS average Mortgage rates Mortgage rates

Starts price (1 year) (5 year)

Toronto 2007 33,293 95,164 $377,029 7.35% 7.54%

2008 (F) 35,000 84,000 $394,000 6.95% 7.01%

2009(F) 33,600 77,000 $404,000 6.83% 6.97%

Source = CMHC

MLS = Multiple Listings Service

The mortgage rate forecasts are particularly interesting as current Canadian mortgage rates are at the following levels:

Fixed closed 1 year = 4.69%
Fixed closed 5 year = 4.99%

With all the recent woeful economic news coming out of the US, despite the fact that Canada's economy is now more independent than it has been in the past, you would expect mortgage rates to decrease or remain flat in the next year or so.

I guess, only time will tell.

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Home Mortgage Loan Interest Rate forecast for 2009

A lot of people are very interested to 2009 has an idea of what home mortgage interest up. Even with the housing stimulus package in full effect, the economy and in particular the housing market is in distress. Currently, interest rates increased by 5% a couple of weeks, as I predicted in January.

Here's the exact quote from me "On the whole I expect the rates of home loans in 2009 to take a temporary 0.5%steady increase in 2009, followed by decline in the total. "It 's quite easy to understand why I made some predictions, mortgage interest and I expect that will continue a. For example, I learned that in January with super-low interest rates for home owners would flock to refinance or change loan. They did, and lenders will be conducted with similar documents and to cope. to a temporary increase (what just happened) by about 5% across the boardon all mortgage rates. This is due mainly to relieve lenders and the banks of the workload and the other funding requests will be reviewed and closed.

For the remainder of 2009, I predict that the current home of the monthly interest remain the same for the next 3 or 4 After that, I think the prices start to fall a drop of 0.25%, 0.25% or more or follow later this year or early next year.

Keep in mind thatonly home and apartment owners with the best credit score will be for the lowest rates of interest, but also a homeowner with poor credit are able, should receive fair treatment on their home loan refinancing or modification . homeowners should also know that even though prices have recently risen slightly earlier, the current prices are really low and yet when refinancing or modification of a home loan can still be very useful for homeowners in financial rightSituation.

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