Will a half point bother you?

[Lost_in_the_HTTP]

Fed lifts interest rates by 1/2 point and to start sell off of $9 trillion bond stockpile in June

MarketWatch|27 minutes ago
The Federal Reserve on Wednesday raised a key interest rate by a half point and reaffirmed a more aggressive strategy to try to subdue the worst outbreak of U.S. inflation in 40 years. The central bank also said it plans to start selling off its nearly $9 ...



I have one adjustable rate interest loan that is almost paid off. Currently at 2.75 or something like that, so will go to 3.25 or so. On pace to have it paid off by next February, so the dollar or so rate hike per month won't be an issue. I could pay it off sooner and might decide to do so.

 

[dphantom]

house and boat refinanced last year, boat at 3.25 and house at 2.75 that's all was expecting rates to rise sooner, sometime last year

 

[Pens1566]

Nope. Mortgage under 3 already. Just means better returns on savings accounts.

 

[evident]

so friggin glad i refinance my house at 2.25% right before the insurrection.

 

[BoomerD]

We refinanced at 2.5% last fall. Made a nice (<$100/mo) reduction in our mortgage. I remember buying a house in 1999 @ 7.25%...

 

[hal2kilo]

Fed lifts interest rates by 1/2 point and to start sell off of $9 trillion bond stockpile in June

MarketWatch|27 minutes ago
The Federal Reserve on Wednesday raised a key interest rate by a half point and reaffirmed a more aggressive strategy to try to subdue the worst outbreak of U.S. inflation in 40 years. The central bank also said it plans to start selling off its nearly $9 ...



I have one adjustable rate interest loan that is almost paid off. Currently at 2.75 or something like that, so will go to 3.25 or so. On pace to have it paid off by next February, so the dollar or so rate hike per month won't be an issue. I could pay it off sooner and might decide to do so.

Nope. Refied 2 years ago @ 3.35% for 30. Oh dear, I might be dead before it's paid off.

 

[Fenixgoon]

I got my mortgage at 2.625. I get letters asking me to refi at 3.X% 😂

 

[soundforbjt]

Nope. No mortgage, no car payment, just adds to my savings.

 

[evident]

We refinanced at 2.5% last fall. Made a nice (<$100/mo) reduction in our mortgage. I remember buying a house in 1999 @ 7.25%...

Housing in 99 at even 7.25% was probably still way cheaper than it is to buy a home these days. housing prices never really dropped even after the 2008 recession, and they've only skyrocketed since, making it tough for most millenials to purchase homes in their 20's. now we're going to have high prices and high(er) rates.

 

[GodisanAtheist]

To OP: Not really. Mortgage is not the best rate in the world but paid down pretty substantially, auto loan is basically free (got the car during the December 2020 doldrums, so got a decent price too).

Only outstanding item I have would be to pick up a low rate HELOC "just in case" and keep it handy in the event things went sideways for me for some reason, but even then the rates would be fairly low for me at the moment and I wouldn't even have an immediate plan to use the funds.

 

[Lost_in_the_HTTP]

Old stuff? Ha!! I bought my first house around 1980. Can't find exactly when, but 81-82-ish. Got a super deal using a VA mortgage ... 9.something which was about a point or more below conventional. Sale price was around $13K (yes, that's right) and the payment was $300 something. Don't check my math bacuse I'm going from memory which ain't all that good n'more.

 

[hal2kilo]

Housing in 99 at even 7.25% was probably still way cheaper than it is to buy a home these days. housing prices never really dropped even after the 2008 recession, and they've only skyrocketed since, making it tough for most millenials to purchase homes in their 20's. now we're going to have high prices and high(er) rates.

Can you imagine? My first house purchased in 1981 in Groton, CT for $44000, had an interest rate of 14.25%. Fortunately, for only 5 years, until I sold it to move out west for $72000. If I had stayed 1 more year there, it could have gone for the high 90s. Markets go crazy in spurts.

 

[BoomerD]

Housing in 99 at even 7.25% was probably still way cheaper than it is to buy a home these days. housing prices never really dropped even after the 2008 recession, and they've only skyrocketed since, making it tough for most millenials to purchase homes in their 20's. now we're going to have high prices and high(er) rates.

We paid $132k for our 4br/2 bath in Modesto. Current price in that neighborhood is around $500k...until the next crash.

 

[Exterous]

Hopefully it tames inflation without tanking things. But all my stuff is fixed rate much lower than inflation so no hurry to pay that off

 

[Dulanic]

No. And it needed to be done, the fed rate had been far too low for too long.

 

[Thump553]

Already the refinance market activity is a tiny fraction of what it was. With this increase is almost certainly going to be essentially dead for the foreseeable future. Expect lenders and other firms in the industry to begin layoffs very shortly, if they haven't already done so.

I'm on an adjustable-intentionally so because I decided to aggressively prepay it rather than blow thousands on closing costs and restarting the 30 year clock. Mine recently adjusted from 2.25% to 4% but the monthly payment actually went down because of my prepayments. Even if my adjustable maxs out it will be doable.

Expect car loans, credit card rates, personal loan rates etc. to climb rapidly. Basically what the Fed is trying to do is tamp down inflation by making purchases very expensive or unfeasible. It's painful to turn inflation around. That's a big reason why both Ford and then Carter were one term Presidents.

Since 2008 we have had extremely/insanely low interest rates so in many respects this change is well overdue. It is going to lead to a contraction in the economy which is always bad news for the party currently in power. We are in for rough years ahead but if the GOP gets back into power the billionaire class will be well protected.

 

[nOOky]

It will, I need to invest some money in I bonds etc. and I see some things are already up.

 

[sdifox]

nein.

 

[Ken g6]

Nope. Refied 2 years ago @ 3.35% for 30. Oh dear, I might be dead before it's paid off.

I just got in a house at 3.9%, before the rates started to really take off. Is that why they call it a mort-gage?

 

[Lost_in_the_HTTP]

I'm on an adjustable-intentionally so because I decided to aggressively prepay it rather than blow thousands on closing costs and restarting the 30 year clock. Mine recently adjusted from 2.25% to 4% but the monthly payment actually went down because of my prepayments. Even if my adjustable maxs out it will be doable.

Expect car loans, credit card rates, personal loan rates etc. to climb rapidly.

I don't even know how to figure how much I've saved over four years on this one loan. The adjustable rate was about 2-3 points below the fixed rate. I've always paid at least $50 over the set amount. I just noticed a few weeks ago that the set amount had dropped to right around $100/mo, but I'm still paying the same amount every month to get it gone. I know I've saved a few thousand in interest.

The rest of what I 'owe' is all on zero interest credit card promos. I put $3,500 on 18 months ago on a promo, no interest if paid with two years. I'm way ahead on that one so far and will have it paid off in about 22 months. Similar arrangements on two others.

I just opened another new one this week, 0% for the first 15 months, then 15.84% after that. By then I'll have the initial purchases paid down to zero and won't pay any interest at all. I did it because I have a $1,400 insurance bill coming due the first of June. I could pay that in installments, but I get about a $150 discount for paying in full. Top that off with the $200 bonus on the new card if I charge $500 in the first 45 days. No interest and $350 off is pretty sweet to me.

 

[fleshconsumed]

Yeah... We're moving this summer, so we have to sell the house, rising interest rates make it harder. We're going to rent for a few years until we get to know the area better and then will look into buying again, which, again, is going to be more expensive due to higher rates.

I get why it has to be done, but it does make our lives more complicated.

 

[allisolm]

Nope. No mortgage, no car payment, just adds to my savings.

This.

 

[Thump553]

* * *
The rest of what I 'owe' is all on zero interest credit card promos. I put $3,500 on 18 months ago on a promo, no interest if paid with two years. I'm way ahead on that one so far and will have it paid off in about 22 months. Similar arrangements on two others.

I just opened another new one this week, 0% for the first 15 months, then 15.84% after that. By then I'll have the initial purchases paid down to zero and won't pay any interest at all. I did it because I have a $1,400 insurance bill coming due the first of June. I could pay that in installments, but I get about a $150 discount for paying in full. Top that off with the $200 bonus on the new card if I charge $500 in the first 45 days. No interest and $350 off is pretty sweet to me.

If you are talking about the zero interest loans for a cash promotion on credit cards, doesn't your bank charge a hefty up front fee for those? Bank of America certainly does-and they also charge credit card rate interest on any purchases on that card during the so-called free payment period. It can make sense if you do such a loan on a card with a zero balance that you don't ordinarily use. I've used them in past (when I had fairly high regular costs but irregular income) but it's good to go into them with eyes wide open.

If you are talking about zero interest loans on purchases, those make sense IF the purchase price isn't inflated to cover the interest cost. I see those so often on high profit margin items and/or items that are hard for a layman to figure costs (furniture and home improvements respectively come to mind), who knows if they are a good deal or not.

 

[evident]

We paid $132k for our 4br/2 bath in Modesto. Current price in that neighborhood is around $500k...until the next crash.

next crash will bring it back down to what... 450K? lol.

 

[Juiblex]

I'm shocked at this inflation. No, not really. Once I heard about free money being mailed to me by the IRS we all knew this was gonna happen on the back side.

But lets keep giving out free money... That'll make it all better.