Interest rates have a direct effect on everyone's finances, whether it's their mortgage payments, credit card bills, or savings account. In the beginning of 2004, interest rates in the US and Canada were at their lowest levels in 40 years. Interest rates are based on the borrower's primary loan rates and do not include discounts for interest reduction benefits. Firms are worried that rising interest rates will keep making the pound stronger against the US dollar, which will make it harder for exporters to do business. This year, the interest rates on mortgages with adjustable rates will go up for about 2 million Americans, and many of them can't pay the higher bills. Since credit card rates are often tied to short-term rates, lower interest rates could also help consumers. Usually, for every prediction that interest rates will go up, there is a prediction that they will go down. The new interest rates on deposits would only apply to new deposits and to the renewal of deposits that are about to end. Long-term interest rates, like those on fixed-rate mortgages, depend more on what people think will happen in the future than on what is happening right now. Banks in the UK offer a wide range of services and accounts. When interest rates go up, it goes without saying that it costs more to borrow money. It affects all other short-term interest rates, including those for home equity loans.
Rates on mortgages
More than one out of every four mortgage requests are denied. On the other hand, if you've paid off your mortgage and have a lot of cash lying around, higher rates mean the bank will pay you more to let your money sit in savings accounts or GICs. Also, these mortgages have been put together and sold as securities all over the world, which means that the problems in the housing market have spread to many other credit markets. But long-term interest rates are more often linked to mortgage rates, which have been going down. You might want to blame or praise your mortgage lender for the low or high interest rate she gives you, but it's not up to her. When you read about mortgages or secured loans, keep in mind that you could lose your home if you don't pay your mortgage or other loan on time.
Charge cards
Interest rates have a direct effect on everyone's finances, whether it's their mortgage payments, credit card bills, or savings account. Rates on variable mortgages and other loans with floating rates, like lines of credit, go up and down with the prime lending rate. Also, these mortgages have been put together and sold as securities all over the world, which means that the problems in the housing market have spread to many other credit markets. Since credit card rates are often tied to short-term rates, lower interest rates could also help consumers. The actual rates and fees for your loan may be different from these numbers. This will depend on where you go to school and your credit history. Who would have thought that the Bank of England would be the bank most hurt by the credit crunch?
