The spread of COVID-19 continues to threaten our economy and the federal reserve made another emergency cut to interest rates, slashing the federal funds rate by one percent.
The federal reserve is concerned with keeping money flowing throughout the economy. Financial consultant John Caserta says this move is so people still spend and borrow. Lower rates encourage more money into the economy. It could be a good thing for mortgages and refinancing mortgages.
If you are getting a 30-year mortgage, you could see the rates high 3s, maybe low 4s and maybe even lower. Caserta also says that it is a great time to refinance if you’re planning on staying in that house for the long run. You have to take into consideration the cost of re-financing and what that break-even point is.
Your credit cards may be impacted as well, especially ones that have variable interest rates. So as the rates start to come down, you’re going to see the interest rates on your credit cards become lower as well.