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quasi · 03-30-2010, 05:05 PM

So right now I have a great rate on an open variable, Prime -.75 which is equal to 1.50% right now. I have the prime minus rate for 30 more months. I know that prime as well as fixed rates are going to rise. I also know that even with prime rising for the next 30 months I should be below the 3.65% I can lock in for on a 5 year fixed term. I have this 3.65% option for the next few days well I make up my mind.

Now what I`m trying to figure out is what would rates have to be at in 30 months in order to make it worth while for me to take a chunk of my mortgage and move it into the fixed rate. Say I move 40% of my mortgage to the fixed rate and leave 60% at the variable rate for the next 30 months. I guess my concern would be that say in 30 months prime has risen 2.5-3% and fixed rates have gone up say 2%+.

Does it make sense at all to hedge my mortgage locking in part of it now and leaving part of it open to protect myself against rising rates so only a portion comes due in 30 months and the rest in 60. Do I just ride out the open variable and live with it when it comes to to reknew.

03-30-2010, 05:05 PM	#1
quasi Willing to sell body for a few minutes on RS Join Date: Jul 2001 Location: Cloverdale Posts: 11,646 Thanked 3,925 Times in 1,389 Posts Failed 83 Times in 42 Posts	Mortgage question So right now I have a great rate on an open variable, Prime -.75 which is equal to 1.50% right now. I have the prime minus rate for 30 more months. I know that prime as well as fixed rates are going to rise. I also know that even with prime rising for the next 30 months I should be below the 3.65% I can lock in for on a 5 year fixed term. I have this 3.65% option for the next few days well I make up my mind. Now what I`m trying to figure out is what would rates have to be at in 30 months in order to make it worth while for me to take a chunk of my mortgage and move it into the fixed rate. Say I move 40% of my mortgage to the fixed rate and leave 60% at the variable rate for the next 30 months. I guess my concern would be that say in 30 months prime has risen 2.5-3% and fixed rates have gone up say 2%+. Does it make sense at all to hedge my mortgage locking in part of it now and leaving part of it open to protect myself against rising rates so only a portion comes due in 30 months and the rest in 60. Do I just ride out the open variable and live with it when it comes to to reknew. __________________ “The world ain't all sunshine and rainbows. It's a very mean and nasty place... and I don´t care how tough you are, it will beat you to your knees and keep you there permanently, if you let it. You, me or nobody, is gonna hit as hard as life. But ain't about how hard you hit... It's about how hard you can get hit, and keep moving forward... how much you can take, and keep moving forward. That´s how winning is done. Now, if you know what you worth, go out and get what you worth.” - Rocky Balboa