Analysts expect at least two rate hikes this year, although rates will remain relatively low.
INDIANAPOLIS – 2021 has been a year of low interest rates, but what if you have to buy a house or a car this year?
The good news is that interest rates shouldn’t change too much, but there are things to be careful of.
BankRate chief financial analyst Greg McBride predicts the Fed will impose two hikes this year to help calm things down. But even with these increases, McBride expects mortgage rates to stay below 4%. For auto loans, the forecast is that the average new five-year auto loan will be 4.4% and the average four-year used auto loan will be just under half a percent of. more to 4.85%.
If you are a person with credit card debt, you will be affected by the increases because your card uses a variable rate, which means it changes.
“So when interest rates go up, your credit card rate goes up pretty quickly, usually within one or two statement cycles,” McBride said. “So now is the time to be really aggressive in repaying this debt, by speeding up the repayment because
that this cost will only increase. “
If you’re a saver waiting for your money to finally earn more interest, don’t get too hopeful. McBride said most banks sit on a pile of deposits, which means there’s no reason to try to attract more.