Your Questions About Mortgage Rates Graph

Laura asks…

I need a graph with the past 5 or 10 year mortgage rates?

admin answers:

Http:// provides the cash rate for the last 15 years. I’m nowhere near an expert, but mortgage rates in Australia generally shadow (obviously above, rather than below) the underlying cash rate set by the Reserve Bank.

I would suggest that some time spent on the RB Web site should give you some decent answers.


Thomas asks…

Where can I find graphs or charts showing historical mortgage rates for the USA from 1970’s to 2007?

admin answers:

Much to big to paste here so I’ll just put in the link.

By the way I just searched on the words in your question and *bing* up popped the answer 😉

Hope that helps.

George asks…

is this a misleading graph? PLEASE HELP?

there is a graph on this webpage is it misleading?

admin answers:

It seems to indicate that interest rates (30 yr loan) were a little over 4.4% on November 10. I do not know if this is true or not, (did not read the whole article) but would guess it is correct.

Why do you think it is misleading? – should have given us a hint. [ Hard to picture things exactly on a tiny graph.]

William asks…

Is it possible to find data about mortgage interest rest for last 15 years?

I’m doing economic project about demand analysis and mortgage interest rest is one of the factor.. but i was trying to search for data about this interest rate for last 15 years (data or graph for last 15 years)… but I always found a quote or 15 years fixed rate, which are not what I am looking for. And I also found out that mortgage interest rest also different depends on each person’s credit, so how I can find data about mortgage interest rate for last 15 years..

Thank you very much.

admin answers:

You can not, because there is no such a rate. What there is, is the bank of England Base rate and the LIBOR (London Inter Bank Lending Overnight Rate). These two rates are the basis that banks use to work out their rate. A mortgage rate would almost always be more expensive.

The base rate is the rate at which the Bank of England will lend money to other banks (they will add some based on the banks own credit rating) so this is the cheapest money banks can lend. The other rate, LIBOR is typically .25 to .5% higher and this is the rate at which banks will lend money to each other overnight to make up some shortfall in their own books (plus a margin depending on the banks own credit rating).

So most banks will be lending money at LIBOR plus a little bit and then lend it out to homeowners. A very good deal would be if they could get cheap money from the Bank of England at the Base rate.

So for your project, I would state that I would use the Average between Base and LIBOR and add a margin of 3% and then look for times where there was a big difference between Base, Libor and Actual Rates or SVR(Standard Variable Rate)

You may be able to get the SVR from say Barclays for the same period and then compare. Barclays SVR is often used in contracts between companies and individuals.

Northern Rock last year had a SVR of 7.9% because they could not borrow money at the low rates and had to pay much more than before, maybe 4% when everyone else was paying less than 3, and because they have to make a profit, their rate went up to 7.9%. They also used this as a strategy to push buyers away because it was so expensive, so that people would take out a mortgage elsewhere where it was cheaper and they get their money back to pay back the government bail out and reduce their mortgage book.

So look for times where there was a difference, such as recently when the Base was 1% but LIBOR stayed at about 5%. Mortgage rates are always higher than LIBOR. LIBOR is used internationally and the USA as the real Base rate.

Good luck

Susan asks…

How do Treasury yields affect other interest rates?

I’m having an economic brain-fart here…

The hypothetical situation I’m considering is- say China and other big buyers of our Treasury debt all-of-a sudden decided to sell off their treasury holdings. Treasury prices would fall tremendously and yields will rise.

But then what is the link to the rest of the economy? Obviously our government will be scrambling to cut spending and probably raise taxes. What though would be the direct affect on other interest rates (FFR, mortgages, etc.)?

One last thing- if my hyptothetical situation were to happen, wouldn’t the flood of dollars coming home also exert downward pressure on the interest rates, via the simple money supply/demand graph?
(Ok, brain fart subsided just a tad- as Treasury yields increase, other bond prices must follow suite since their risk is greater than that of Treasury’s).

admin answers:

Treasuries today are considered a benchmark of safety. So other yields can be interpreted as an increment of risk over treasuries. However in the unlikely hypothetical you’ve created, Treasuries would no longer be considered the safest place to park cash (the only reason you would abandon Treasuries en masse is because they appear more risky), so it’s safe to assume that some other government bond might replace it as a benchmark. Hard to say what that would be. It’s your hypothetical.

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