The FED announced they have raised the overnight fund rate by a .25%. This is the rate Banks borrow at overnight.

This is a modest move and will not affect fixed long term Mortgage Rates.

The rate increase has the following features:

  • They are only considering raising rates because the Fed believes our economy is strengthening and can handle a bump in rates
  • This will have a direct impact on variable auto loans, home equity credit lines, small business loans, credit cards
  • This will have a positive effect on interest rates the banks pay on savings accounts, CD’s, and other interest bearing accounts
  • On a $250,000 Home Equity Line of Credit, there would be an approximate $52 difference in monthly payment, nothing life changing

Don’t be afraid, be informed!

Source: Madison Lending Group