WAKEFIELD, Mass. — There has been another bump in the interest rate. The Federal Reserve announced Wednesday it was raising its key federal fund’s rate to more than 5% — a 16-year high — as it continues its firefight against persistent inflation.
Buying a car or a home is getting more expensive for many reasons. Another bump in the short-term interest rate by the Fed is going to trickle down to the borrowing costs.
Esther Parks is the owner of StressLess Car, a car brokerage, and she says these interest rate bumps can cost you. A loan on a $30,000 dollar vehicle for 72 months used to be about $481 dollars a month. Current rates at nearly 7 percent drive the monthly payment up to $524. That’s an additional $3,000 over the life of the loan.
Chief Operating Officer, Jackie Louh, with Lamacchia Realty, says changing your mindset on these big purchases will pay off later. “Marry the house, date the rate,” said Louh. “Don’t stress too much about the rate right now because there is going to be a time when you can re-fi and bring it back down.”
At car dealerships, Parks says used cars are not always the best deal right now.
“Right now the used car prices are cusping the new car prices so it is better to buy a pre-owned? You have to really do your homework,” said Parks.
The one common theme in both markets is many people seem to be in a holding pattern and that is what is throwing both markets off.
This is a developing story. Check back for updates as more information becomes available.
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