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Interest rate reductions would be a positive for consumers. It would imply lower mortgage rates helping the housing market, Jeff MacLellan writes. Here's how soon interest rates could start dropping
This is all due to the fact that the federal interest rate is not tied to mortgage rates, with different factors influencing if they go up or down. ... to see rates in the 5% range anytime soon ...
As soon as the Fed announces a new federal funds rate, it goes into effect immediately. However, the time it takes to trickle down to consumers varies based on the type of borrowing you hope to do ...
This meant higher interest rates on credit cards, mortgages and auto loans, but also higher returns on certain investments, such as U.S. government bonds and high-yield savings accounts.
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As an example, here's how your monthly payments and total interest costs compare on a $400,000, 30-year fixed-rate mortgage at different interest rates: Interest rate Monthly payments