Interest Rates vs. Mortgage Rates

The economic market is in a state of uncertainty as financial institutions are trying to predict the outcome of the COVID-19 pandemic. There are a number of factors coming into play – from unemployment filings to gross domestic product – that paint a larger picture of the economic impact of the coronavirus.

One thing you’ve likely heard on the news or read online is that interest rates are falling. In an effort to stimulate the economy, sometimes the federal reserve will lower the interest rate to entice people to spend, which ultimately provides an economic boost. This means that interest rates on bank loans, car loans and other loan projects might be lower now than they were a few weeks or months ago.

It’s important to know that interest rates are not the same as mortgage rates. Mortgage rates are controlled by a number of different factors, and tend to rise in high-risk times. Because the economic future is uncertain, mortgage rates are rising. This means that mortgage rates are now higher than they were a few months ago. If you have a mortgage and your rate is locked, the change in mortgage rates does not affect your home loan.

Mortgage rates are ultimately out of a homebuyer’s control. While you want to get the lowest rate that you can, it should be noted that now is still a good time to buy a home if you’re in a strong financial situation. United Housing can help you prepare to make a home purchase through online and remote Homebuyer Education courses.