Rising Interest Rates

Rising Rates

Back in December the Federal Reserve increased its key interest rate by a quarter of a percentage point. While it may not seem like a lot now, that quarter of a percent may have a hefty impact on your life – and wallet.

What to Expect

Be aware that the Fed may raise the interest rate again this year, possibly as soon as June. Now is a great time to take advantage of the current rate before things start to get out of hand. Also know that depending on the size of your current loan, your monthly payment could be affected by drastically different amounts. For every one percentage increase in the interest rate, expect a 10 percent increase in your monthly mortgage payment. The current rate is hovering between 3.5 and 5 percent, making the impact on mortgage payments the lowest we have on record.

The Up Side

Although housing is seemingly through the roof, the low interest rates make this the best time to buy or invest in a home.