Download PDF File Mortgage Interest Rate Forecasts . months, depending on their term. Mortgage Interest Rate Forecasts. Interest rate. Forecasts for. Jan. 13, 2012 3 mo. 6 mo. 12 mo. Flex rollover mortgage 1). 1.45 …

Credit Suisse Mortgage Interest Rate Forecasts
January 13, 2012 12-Month Interest Rate Forecast:

Euro Crisis Keeps Prime Rates at Low Point As expected, Swiss economic growth slowed further in the third quarter 2011. Nonetheless, there was a year-on-year increase of 1.3 percent. Comparing by quarter, the drivers of growth proved to be consumption and construction investment, whereas exports lost momentum amid the turbulence created by the euro crisis and the knock-on effects of the strong franc. These developments are likely to have brought Swiss economic growth to a virtual standstill at the end of the year. Consequently, we are expecting weak annual growth of a mere 0.5 percent for the current year. There is currently no inflation risk. On the contrary,
6 5 4 3 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Interest rate in % Fix mortgage, 3y Fix mortgage, 5y Fix mortgage, 10y Fix mortgage, 15y Flex rollover mortgage (3-month LIBOR)

the Swiss National Bank (SNB) believes that there is still a danger of deflation triggered by the strong franc. Consequently, the SNB will continue to focus on stemming the appreciation of the franc and holding interest rates low in the months to come. For these reasons, we do not expect prime rates to increase over the next 12 months, so the Flex rollover mortgage is likely to trend sideways. The Fix mortgage interest rates are still at the historic lowest level of August. Once the uncertainty in the markets eases somewhat, medium and long-term interest rates can be expected to rise again. Rather than progressing continuously, however, this development is likely to be subject to fluctuations. Fix mortgages look set to rise by between 70 and 85 basis points over the next 12 months, depending on their term.

Mortgage Interest Rate Forecasts
Interest rate Jan. 13, 2012 1.45 1.10 1.45 2.20 2.45 Forecasts for 3 mo. 6 mo. 12 mo. 1.45 1.45 1.45 1.30 1.50 1.95 1.65 1.80 2.20 2.40 2.55 2.90 2.60 2.80 3.15

Flex rollover mortgage 1) Fix mortgage (3 years) 2) Fix mortgage (5 years) 2) Fix mortgage (10 years) 2) Fix mortgage (15 years) 2)

These interest rates are of an indicative nature and apply to new mortgages for average clients. 1) Flex rollover mortgage (framework term five years). Interest rate based on three-month CHF LIBOR. Interest rate adjusted every three months. 2) Fix mortgages. Fixed term and interest rate for the entire term.

The table shows how the interest rate burden can vary depending on the mortgage type and term selected. The forecasts provide an insight into the potential trends of the mortgages over a three, six and twelvemonth horizon. The Flex rollover mortgage may experience a lateral movement over the 12-month period. Rates for Fix mortgages could rise between 70 and 85 basis points in the next 12 months, depending on the term.

We would be happy to advise you: Our mortgage experts have an open ear for your needs. Please call us at 0844 855 400 if you would like to make an appointment or ask any questions (free of obligation) about mortgages. You’ll also find further information at www.credit-suisse.com/mortgages.
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