The Federal Reserve recently raised the Prime Rate by 0.25%, the first increase since December. We get a lot of calls when the Prime Rates change, wondering how this will impact mortgage interest rates.
While it may seem logical that increasing the Prime Rate will cause mortgage interest rates to be higher, there isn’t necessarily a direct correlation. Below outlines the impact of changes to the Prime Rate and the major causes of mortgage rate fluctuations.
Changes to the Prime Rate impact:
- Credit cards
- Student loan debt
- Rates for home equity lines of credit
Mortgage Interest Rates are impacted by:
- Economic growth
- The Bond Market