MLN runs rate simulations weekly to assess which terms project to have the lowest hypothetical cost of borrowing given:
- The leading nationally advertised rates
- The market's current forward rate expectations
- Historical rate spreads (used with forward rates to project renewal rates)
- An estimated $300 in switching costs at each renewal.
Our simulations test all terms and combinations of terms (e.g., a 3-year fixed renewing into a 2-year fixed, a 4-year fixed renewing into a 1-year fixed, etc.).
All borrowing costs are estimated over a 5-year span for comparison purposes.