This research examines real estate mortgages. The issues of interest with respect to real estate mortgages are interest rates and the advantages and disadvantages of alternative interest rate structures. The findings of this research are presented in discussions related to real estate mortgages for commercial properties and real estate mortgages for home buyers.
Real Estate Mortgages For Commercial Properties
The focus in the examination of real estate mortgages for commercial properties is interest rate levels. Interest rate movements and averages for the June 1993-May 1994 are examined first. Interest rate projections for the June 1994-May 2003 are then considered.
Interest Rate Movements and Averages
Interest rate movements for real estate mortgages for commercial properties are presented in Chart 1, which may be found on the following page. As the data presented in the chart indicate, mortgage interest rates for commercial properties fell through the end of 1993. A slight rate increase was experienced in January 1994; however, interest rates fell again in February 1994. Since February, mortgage interest rates for commercial properties have risen steadily and substantially each month. Average mortgage interest rates over the 12-month period June 1993-May 1994 were 6.92 percent for 30-year mortgages, 6.88 percent for 15-year mortgages, and 6.65 percent for 10-year mortgages.
Interest Rate Movements for Real Estate Mortgages for Commercial Properties June 1993-May 1994
================================================================= Mortgage Term
Period 10 Years 15 Years 30 Years
------ -------- -------- --------
Jun 93 6.81% 6.95% 7.09%
Jul 93 6.78% 6.92% 7.06% ...