INDIANAPOLIS – As the Federal Reserve announces its biggest interest rate hike in nearly three decades, experts say many Hoosiers will need to be prepared to pay more to borrow money.
It’s the latest in a series of interest rate hikes meant to slow down consumer spending. Financial experts say it’s made a difference so far.
“We’ve already seen a slowdown in mortgage applications,” said Andrew Butters of the IU Kelley School of Business.
Butters points out the Federal Reserve raised interest rates to help curb inflation.
“All of us should feel comfort in that they’re taking the issues as it relates to inflation very seriously,” he said.
Financial advisors say in many situations, Hoosiers will just have to be prepared to pay higher interest.
“On a credit card, it just means you’re going to start being charged more interest,” said Andy Mattingly, COO of Forum Credit Union. “So your balance goes up.”
Mortgage rates are also rising, Mattingly said. That impacts homeowners with adjustable rate mortgages and new homebuyers, he added.
“It wasn’t that long ago we were saying a fixed rate mortgage was around 3%,” Mattingly said. “It’s already at 6%.”
Housing is starting to shift from a seller’s market to one favoring buyers, Mattingly said.
The Fed is expected to continue raising interest rates, so if you’re looking to take out a home equity loan or personal loan, it may be better to do so soon, Mattingly said.
“We’re in the cycle where those rates are going to start going up for almost every lender,” he said.
Mattingly added it’s best to choose a program that works best for your financial situation.