iCrowd Newswire
26 May 2023, 04:02 GMT+10
The Federal Reserve ("The Fed") has raised its benchmark interest rate for the third time in a year to help combat record-high inflation. These changes have sent many borrowers scrambling to get debts subject to interest rate increases paid off quickly. But what about long-term loans like mortgages, how are they affected by The Fed's decisions?
Interest rates are what lenders will charge customers who want to borrow money from them. The actual rate a borrower is charged is dependent on several factors, including:
New mortgage applicants should expect a bit of sticker shock with the latest interest rates, especially compared to the last few years. Throughout the COVID-19 pandemic, interest rates for all types of loans were near historic lows. Unfortunately, as demand began to outpace supply, inflation rates began to rise, causing prices of goods and services to increase.
To combat this, The Fed began to enact a series of benchmark rate increases to rebalance supply and demand. The more expensive it is to borrow money, the lower demand for loans which in turn allows supplies to increase.
Consequently, when The Fed raised rates to combat inflation, it created a ripple effect across all lenders that touched credit cards, personal loans, and mortgages.
For those currently in fixed-rate mortgages, you shouldn't expect to see any interest rate increase. Those with variable-rate mortgages, however, should expect notification of rate increases in their mailboxes soon.
New mortgage applicants should expect significant increases even from last year's rates.
While the record-low rates in 2020 aren't coming back soon, there is still hope for more competitive rates soon.
While The Fed's rate increases will impact the price of homes, it's important to remember that not all mortgages are created equal. Apply for a loan that best suits your needs, and be patient as rates adjust towards more reasonable levels.
See Campaign: https://www.credello.com
Name: Keyonda GoosbyEmail: press@credello.comJob Title: Consultant
Tags:Go Media, ReleaseLive, IPS, Reportedtimes, CE, PR-Wirein, Google News, Extended Distribution, iCN Internal Distribution, EnglishGet a daily dose of Business Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Business Sun.
More InformationNEW YORK, New York - U.S. and global stocks tumbled Wednesday as lawmakers continued to navigate their way through Congress ...
NEW YORK, New York - Republicans were in uproar Tuesday over the deal hammered out by President Joe Biden and ...
FRANKFURT, Germany - With U.S. and UK. markets closed for public holidays, it was left to European and broader global ...
New Delhi [India], June 1 (ANI): The government has so far procured 262 lakh tonne of wheat. It has already ...
The Tesla CEO has seen his wealth grow by more than $50 billion this year amid a surge in the ...
PRNewswireMumbai (Maharashtra) [India], June 1: The Indian financial sector witnessed a momentous deal in July 2021 when Sumitomo Mitsui Financial ...
PRNewswireNew Delhi [India], June 1: In India, the pervasive influence of RFID technology is causing a profound shift in industries ...
Washington - The semiconductor trade war between Washington and Beijing may ensnare Seoul as South Korea must decide between backing ...
The Tesla CEO has seen his wealth grow by more than $50 billion this year amid a surge in the ...
Washington [US], June 1 (ANI): Ahead of Prime Minister Narendra Modi's US visit, the US-India Business Council (USIBC) president Atul ...
LOS ANGELES, May 31 (Xinhua) -- U.S. private space company SpaceX launched 52 more Starlink satellites into orbit early Wednesday. ...
Washington - The director of the leading U.S. cybersecurity agency has a message for scientists and top technology company officials ...