As predicted, today the average HECM borrower will see their initial benefits increase by $2,500. After tomorrow, the next rate change will not be until Wednesday, May 27th — Ibis won’t predict that far in advance, BUT today the 10-year Treasury is up by nine basis points. If that holds, this week’s $2,500 gain will go away.
This week fixed-rate HECM’s range from 5.56% to 7.250%.
Using this week’s rates, the first table shows max rates or margins before the next drop in the Principal Limit factor. The percentage drops in the table are for a 74-year old borrower (the average HECM age). How to read the table:
- A 5.81% fixed-rate HECM gives 3.0% less than the max HECM benefit.
- A 3.00% margin HECM LIBOR gives 8.7% less than the max HECM benefit.
A 3.50% margin HECM Treasury gives 12.8% less than the max HECM benefit.
Again this week a L+300 dominates a T+350 — it gives a 4.7% higher Principal Limit. And a L+275 gives a whopping 8.0% higher PL than a T+350.
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