Unseen interest rates

Interest rates are as low as they have been in many decades. But is that good or bad? N.C. State University economist Mike Walden weighs in.

“Well … as in all of economics, you usually have pluses or minuses. … Clearly low interest rates are not good for people who are saving money. So, if someone’s trying to save money — for example, in a CD or some kind of short-term, safe investment — they’re finding they’re getting very low interest rates, maybe 1 percent. Maybe 1.5 percent. In order to get higher rates, they are going to have to take … more risks.

“On the other hand, as we are famous to say, low interest rates are clearly good for borrowers. So for example, if you want to buy a home and you can qualify and you can get a bank to loan you money, this is a great time to take out a mortgage because you’re looking at something like … a 4 percent interest rate. Refinancing homes is very attractive now. If you have a mortgage rate that’s 5 or 6 percent or more and you plan to stay in your house for a number of years, you want to try to refinance that rate down to those nice low 4 percent rates right now.

“So, yes we haven’t seen interest rates this low in a very, very long time. And it does create opportunities, especially those opportunities for people who want to borrow money.”

  • This field is for validation purposes and should be left unchanged.

One response on “Unseen interest rates

  1. Blog says:

    I would like to thanks for the efforts you have put in writing this HP. I very hoping the same high-grade Blogs post from you in the upcoming also. Actually your creative writing skills has inspireded me to get my own Blogsite now. Really the blogging is spreading its wings very rapidly. Your write up is a wonderfull example of it.Regards John

Leave a Response