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Interest Rate Increase

Ashley Brunner

Ashley was born and raised in the Lancaster area and comes from a family involved with Real Estate...

Ashley was born and raised in the Lancaster area and comes from a family involved with Real Estate...

Jun 5 2 minutes read


Increase in interest rates and your mortgage payment

Are the rumors true? Are interest rates going to go up in mid December like the Federal Reserve is predicting? How will this affect your mortgage payment?

Per the NY Times, the Fed’s assessment on inflation states that in November, “inflation has somewhat increased” and is almost at the Fed’s preferred annual pace of 2%. The percent that rates will increase is at about 75% as of last Wednesday according to the CME Group.

An increase in interest rates was predicted to occur in September of this year, and it never happened. How are we to be so sure that it is going to happen in December? The Fed’s predicted for rates to increase four times this year, and if it occurs in December, it would be the first time. The truth is, we don’t know what is going to happen. I can tell you how this may affect your mortgage payment, and it may surprise you in a good way.

  • Mortgage rates often fluctuate independently, not based on Fed rates. The last time Fed rates increased, mortgage rates decreased. This last occurred in December 2015.
  • If interest rates are to increase, as well as mortgage rates, they would likely increase by only .25%. If this is the case, mortgage rates will still be at very low levels.
  • With the shortage of new housing right now on the market, the Fed’s will keep the real estate market in mind when making their decision.

Based on this information, I believe that the real estate market in Pennsylvania will continue to be as great as it is with or without a Fed increase.

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