mortgage rates

James Politi

There was little news in today’s prepared testimony by Ben Bernanke, Federal Reserve chairman, on the exit strategy. Mr Bernanke chose not to talk about the discount rate except to say that lasts month’s increase should not be viewed as a monetary policy shift.

And he mostly went over what he had already said last month in terms of the sequencing of the tightening, with reverse repurchase agreements and term deposits ramping up before – or alongside – an increase in the interest rate on reserves. Scant if any change there.

But one shift in tone did stand out. 

Norway is planning a 90 per cent loan-to-value cap on mortgages. Sweden announced a similar measure two weeks ago, effective July.

Bloomberg reported the release of Norway’s financial supervisory authority guidelines to prudent lending, available in Norwegian here

Hungarians will be borrowing more forints and less euros under one of several new initiatives planned by the country’s central bank.

Interest rates are typically higher on forint-denominated mortgages than, for instance, their euro counterparts. But spreads have been narrowing and the central bank plans to reduce them further. The Magyar Nemzeti Bank will buy forint-denominated mortgage notes up to a maximum face value of 100bn forint ($500m). 

Krishna Guha

Boston Fed chief Eric Rosengren thinks mortgage rates will rise by 50 to 75 basis points in the spring as the Fed stops buying MBS.

That puts him on the high side of the internal Fed debate – various committee members see the likely impact in the 25 to 75 basis point range.