Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.44 percent, down from 4.49 percent last week. That's the lowest since Freddie Mac began tracking rates in 1971.
The average rate on the 15-year fixed loan dropped to 3.92 percent, down from 3.95 percent last week and the lowest on record.
To give you an idea – for a mortgage of Rs. 50 lakhs, the 30 year term 4.4% loan will mean a payment of Rs. 25,038. At Indian rates of 11%, the equivalent payment is 47,617, about 90% more.
Given a mortgage payment of 40% of salary, the person makes 62.5K per month, or 7.5 lakhs a year. At 11% the same person will need to make 14.28 lakhs a year.
From Calculated Risk:
If mortgage rates at this level don’t pick up housing in the US, it ng will. It seems rates were below 5% in the 1950s, btw.
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>Did u watch Jhunjhunwala, Samir and Shankar etc. summit in ET now ?
Well Jhunjhunwala is so much bullish about the global macro outlook for the next 6-9 or 12 months, that itself speaks about his arrogant thinking. It seems he is making lot of money in current trend and that's why he has stopped tracking macroeconomics.
Indian mkt is the scenario where "The room is full of bulls and bulls have the proven historical panicky kinda behavior". The day is not far away when the only exit door will be choked and nobody will be able to sell at profit. The foreigners aka foolish institutional investors are still making only paper profits and those paper profits won't be realised easily.
It is said that Bear mkt rallies dies on low volumes. Indian and global mkts are trading up at low volumes and media is desperately training viewers to participate via brokerage dumb analysts. But clearly their attempts are failing and corporate results, economic outlook, bond yields and blah blah slowly and slowly is getting out of favour.
08.12.10 at 6:04 PM
>Deepak,
May be your comparison is giving a wrong idea to readers. Average home loan in USA is NOT Rs50lakhs. Its 1.25Crore?
Also savings a/c interest rate is also 3% or somewhat? cant say apple to apple comparison here.
best regards
08.13.10 at 7:23 AM
>read this ?
http://www.bloomberg.com/news/2010-08-11/u-s-is-bankrupt-and-we-don-t-even-know-commentary-by-laurence-kotlikoff.html
08.13.10 at 12:31 PM