Is Interest Rate Going Up?

Is interest rate going up?

The Federal Reserve recently announced that it is keeping interest rates low for the foreseeable future. This has led many people to wonder if this will have an impact on the mortgage industry. It’s important to understand that the interest rate is just one factor that determines the cost of a mortgage. The other two main factors are the loan’s term (the number of years you have to repay it) and the loan’s principal (the amount of money you borrow). With that said, let’s take a closer look at how interest rates can affect your mortgage payments.

What is the Federal Reserve?

The Federal Reserve, also known as the Fed, is the central bank of the United States. It was created by the Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed is responsible for supervising and regulating banks and protecting the credit rights of consumers. It also administers the nation’s monetary policy, regulates the banking system, and provides financial services to depository institutions, the U.S. government, and foreign official institutions.

How Does the Federal Reserve Control Interest Rates?

The Federal Reserve uses a number of tools to influence interest rates, including the federal funds rate, discount rates, and reserve requirements. The federal funds rate is the overnight lending rate at which depository institutions lend reserves to other depository institutions. The discount rate is the rate at which depository institutions can borrow reserves from the Federal Reserve. Reserve requirements are the percentage of deposits that depository institutions must hold in reserve against specified liabilities.

The most important tool that the Federal Reserve has to influence interest rates is the federal funds rate. The federal funds rate is the overnight lending rate at which banks lend reserves to other banks. The federal funds rate is set by the Federal Open Market Committee (FOMC), which meets eight times per year to discuss monetary policy. The FOMC sets a target for the federal funds rate, and the actual federal funds rate tends to fluctuate around this target.

When the FOMC wants to increase interest rates, it will typically raise the target for the federal funds rate. This causes banks to charge higher interest rates on loans, and it also causes consumers and businesses to borrow less money. When borrowing decreases, overall economic activity slows down, and this can help to control inflationary pressures.

If you’re wondering whether interest rates are going up, it’s important to keep an eye on both the target for the federal funds rate and actual federal funds rate.

When Are Interest Rates Going Up?

The Federal Reserve has been keeping interest rates at historic lows since the Great Recession in an effort to spur economic growth. But with the economy now on solid footing, many experts believe it’s time for rates to start rising again. The big question is when?

There is no definite answer, but most experts believe the Fed will begin slowly raising rates sometime in 2015. The exact timing will depend on a number of factors, including inflation, unemployment and the strength of the housing market.

Of course, even if rates do start rising next year, they’re still expected to stay relatively low by historical standards. So if you’re thinking of taking out a loan or credit line, don’t wait too long – now is still a good time to lock in a low rate.

What Does This Mean for You?

If you’re thinking of buying a home or refinancing your mortgage, you may be wondering how the recent interest rate hike will impact you.

In short, if you qualify for a conventional loan, you can expect to see your interest rate increase by about 0.25%. This means that on a $250,000 loan, your monthly payment would go up by about $39.

Of course, every situation is different and your actual payment will depend on many factors, including your credit score, loan type, and down payment. If you’re not sure what to expect, it’s always a good idea to speak with a mortgage professional who can help you compare your options and find the best loan for your needs.


There is no clear answer as to whether or not interest rates will go up in the near future. However, if you are considering taking out a loan or investing in a home, it may be wise to do so sooner rather than later. Interest rates could potentially rise in the coming months, so locking in a low rate now could save you thousands of dollars down the road.

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