No Rate Increase Gives Consumers More Time to Refinance

Federal Reserve expected to let interest rates stand

No Rate Increase Gives Consumers More Time to Refinance
March 17, 2016

The Federal Open Market Committee meets this week, but the Federal Reserve is expected to leave interest rates unchanged. While they have not ruled out increasing rates as early as next month, the decision will extend the time consumers have to take advantage of lower interest rates by refinancing mortgages or paying ahead on their credit cards.

Many financial experts expect rates to increase by June unless the economy slips. In the past month, the economy has seen improvements following the stabilizing of various global markets. This comes after a very volatile January that saw oil prices plummet, leaving consumers and investors alike cautious. However, while the first quarter of 2016 has shown great improvements over the final quarter of 2015, many expect the slow wage growth is one of the main reasons behind the Fed’s decision to hold interest rates steady.

Wages have actually declined since February, and unemployment has remained at 4.9 percent. By leaving the interest rate unchanged, the Fed is giving consumers more time to take advantage of the low rates and refinance their mortgages. They can also use this time to refinance any debt that has a variable interest rate, the rate that is directly affected by the Fed’s decisions and is often the cause of loan defaults.

Economists expect the rate, which currently sits at 0.25 percent, to reach as high as 1.0 percent by the end of the year, increasing the amount of interest consumers pay on auto loans, credit cards and mortgages.

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Carla | 03.17.16 @ 18:04
It is nice to hear that rates are unchanged. It is a great time to refinance before they go up. I may have to look into this. Thanks for the heads up!
Erin | 03.17.16 @ 18:04
It looks like now is the time to get those refinances done if they haven't been already. These rates can't possibly stay low for too much longer.
Elaine | 03.17.16 @ 18:05
I realize that low rates means more people can improve their homes or just buy a home. However, I thought that them being low for so long was not a good thing. Meant that the economy wasn't In That good of shape. I don't know though.
irene | 03.17.16 @ 18:05
Good news I suppose for anyone thinking about refinancing. It worries me though how it seems one minute the economy is picking up and the next it seems to decline
Brittany | 03.17.16 @ 18:08
I think that its great that it allows customers more time and such. It can make things a less of a burden.
Kyle | 03.17.16 @ 18:09
Having lower rates is def good for people, as it helps them be able to make payments and not have to worry about being slapped with more and more interest.
Kailie | 03.17.16 @ 18:11
Not being slapped with unexpected rates increasing is a huge bonus. I've had something like that happen to me not too long ago
Jo Ann | 03.17.16 @ 18:12
Great news for those who needed to refinance, Just a shame that wages have declined since February. That isn't good news.
Sara | 03.17.16 @ 18:14
I might have to look into this before rates go up. I guess now is the time to refinance if you need to.
Sunny | 03.17.16 @ 20:04
This year we can expect two rate increases from the FOMC - FED. If you are considering to buy or refinance a house, now is the time while Mortgage rates are historically low.
Beth | 03.20.16 @ 03:45
May I please ask where you can find the best home refinance rates? I live in So. Ill. and most rates I find are high 3's or 4 to a little over. Thank you,
$commenter.renderDisplayableName() | 01.28.21 @ 12:58