Co-op/condo mortgage rates rising

Real Estate Weekly, Feb 2, 2000

As the century ended, economic euphoria continued and the result was higher mortgage rates for New York luxury co-ops and condominiums in December.

So reports The Manhattan Mortgage Company, a leading specialist in co-op, condominium and private home residential financing, which surveys and analyzes New York mortgage rates and borrower preferences on a monthly basis.

According to its December report, which is based on data from over 30 major lending institutions, all serving the New York residential marketplace, the two most popular fixed-rate mortgage products rose during the month, as did all five of the leading adjustable rate mortgages.

In the fixed-rate category, 15-year fixed-rate mortgages climbed to 8.125 percent from 8 percent, while 30-year fixed rates increased from 8.25 percent to 8.375 percent.

In the adjustable mortgage category, one-year adjustables climbed from 6.5 percent to 6.75 percent; three-year products rose from 7.125 percent to 7.375 percent; five-year adjustables increased to 7.625 percent from 7.375 percent; seven-year adjustable loans increased to 7.875 percent from 7.75 percent; and 10-year adjustables averaged 8 percent compared to 7.875 percent in November.

"The strong performance of both the economy and stock market has sent the bond market skidding and mortgage rates spiraling," asserted Melissa Cohn, chairman and CEO of The Manhattan Mortgage Company, who believes that "this trend will continue as long as the economy keeps expanding."

In terms of loan preferences, The Manhattan Mortgage Company survey reported that 29 percent co-op/condominium borrowers chose five-year adjustable rate mortgages in December, while 30-year fixed rate mortgages accounted for 24 percent of the marketplace.