Time to SWAP? - 09.12.2008

Author: Michael Aglony Posted on: 09 December 2008

On completing my Financial Planning qualifications, fortune telling was not one of the modules covered off.  Pity.

The question I am being asked several times a day, is when is the right time to take a deal.  When are rates going to hit the bottom (if they haven’t already).  And how long will they stay there. 

SWAP rates are coming down on a almost daily basis.  So is LIBOR.  It looks very apparent that there is going to be plenty of room for lenders to bring down their pricing over the coming weeks.  However, rates are only going to go so far down, before they go back up.  And they will go back up.  Therefore, there is a very strong argument for locking into a  long term residential fixed rate in the coming months. 

The big question is when is the time going to be right, when have rates bottomed out.  Back to the crystal ball.  My personal belief is that the start of next year will see a wave of reduced pricing which will arise from a combination of reductions in SWAP rates plus fresh new targets for the lenders.  So please do keep a eye on our website to see what crops up in January.  Alternately, if you want to get in touch, we can let you know what you can have now, and also diary a date to revisit this in the new year for you.