I think you have to understand the perspective on interest rate.
They say interest rate must go up because it has been near 0.
So 0.5 -> 1% is still double in term of percentage.
Right now the govs have borrowed so much, it is not in their best interest to raise interest rates. However interest rate is also affected by inflation.. eg UK inflation is getting high and interest rate is one of the tools to control it.
The theory is people barely able to make payment at the current interest rate and will break their finances if say interest rate is raised too high.. or their purchase was bought at such a high price but the price has dropped so low now, it is impossible to refinance etc.
The things is if you are well off and have a lot of money, you can borrow money at a low cost to make more money (eg Apple and its bonds).. A lot of first time home buyers can't / don't get the best rates (besides it is usually locked in for 3 years?). That's where things can get bad.
When to watch? When Bernanke say QE is over.. that's the official sign that the cheap interest rate period is over.
Quote:
Originally Posted by VR6GTI
Strata fee's always start out low. I think when i first moved into my place it was $180, 4 years later its $296. I'm sure next year ill see another increase.
Every year people say interests rates are going up, every year they are wrong. I guess someone has to be right sometime  |