Anyone locking in interest rates?

[skip]

We are talking to FCC about locking in some of our farm land loans for 5 and 7 years, seems like a good idea to reduce the risk of them going up.

What do you guys think on interest rates for the next couple of years?

[HFL]

We are on variable rates. FCC told me a while back that you have a day or two to lock in rates if the bank of Canada rate starts to rise. As a result we haven't been in a hurry to lock in rates. We keep a close eye on the bank of Canada rate though.

[Choice2U]

Agree with hfl. Besides bank rate, keep an eye on longer term rates to see if they begin to move. A miss of the low by a 1/4 or 1/2% may seem significant but will still be acceptable given my view that once interest rates start moving up...unfortunately, the sky will be the limit.

[Hopperbin]

Agree with HFL floating is still the as low as locking in for a year and the local credit unions will give warning of interest rate increases so why lock in now? Unless your looking for longer term. That said the banks are raking in good on the floating rates that they have in the first place.
Another thought of mine, don't have long term loans in the first place, bad idea. Go with a half million or more floating in checking account with land as collateral. Most farmers should be able to use that these days. Will be less interest in the long term and can make purchases without them pesty fees and registrations.

[Hopperbin]

What are these elusive 5 to 7 year rates at these days?

[SASKFARMER3]

Good topic were in process of doing a few changes and will be using variable for the short term at first glance of a big increase coming we will lock in. Basically not going to risk farm on 20% interest rates.

[bgmb]

Be careful guys, by the time short term rates start increasing or you start hearing rumors that they are going to increase. Long term will already be high. Now may be the time to lock in.

Also I would think long and hard about 3-5-7 year rates on 20 yr amort. about the time you have to renew rates could be at their peak.

My advice would be if you are buying land and the only way you can't pencil it with a 20yr amort and a 20yr locked in rate you shouldn't be doing it.

[cottonpicken]

The banks have no control on interest rates.
The bond market dictates where things are going and the banks are obliged to follow.