Fed cuts won’t affect 30-year loans
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feds, Mortgage Interest Rates, rate cut March 21st, 2008The Federal Reserve’s decision to slash short-term interest rates might spare midstaters from a recession, but it won’t save them money on 30-year fixed-rate mortgages.
Here’s why: mortgage rates are not tied to short-term interest rates. Fixed-rate mortgage products are tied to bonds. And right now, bond traders aren’t in a generous mood.
As of March 16, the interest rate on a 30-year fixed-rate mortgage being offered in the midstate — with 5 percent down and zero points — ranged from 5.875 percent to 6.625 percent, according to the Central Penn Multi-List Inc.
Tags: feds, Mortgage Interest Rates, rate cut
