If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

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If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

I have seen times when the Fed cut rates and that caused mortgage rates to go up. Sometimes it would cause the mortgage rates to go down. Sometimes the mortgage rates stay the same.

Mortgage rates react to the inflationary expectations of the investors that provide the money and so if the Fed rate adjustment makes them think that inflation will be held at a very low level then mortgage rates would go down.

If you were about to loan money for thirty years to someone what would you think the rate of inflation over that thirty years would be? How would that expectation be changed by the short term rate adjustment we are talking about?

I don%26#039;t think it will matter at all.

If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

By 1%

If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

they will fall also. but they won%26#039;t go down 1% point.

If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

It%26#039;s hard to say. I wouldn%26#039;t automatically assume the rate is going to go down and banks are getting stricter about lending with all the foreclosures. I don%26#039;t think the fed wants to bail out wall st. either. It%26#039;s becoming a shell game, we have to pay the piper some time.

If the Fed cuts interest rates by a full % point, how will that affect mortgage rates?

If you have a Fixed-rate mortgage, the fed cut would not do anything to your mortgage rate, since it%26#039;s fixed... but, it would reduce new mortgage rates so if you%26#039;re in the market for a new mortgage, the fixed rates would be about half a percent or more lower than they are today.

If you have an Adjustable-rate mortgage, your mortgage rate would fall if the terms in the mortgage call for immediate reductions in your rate when the Fed cuts rates. However, not all loans adjust automatically when fed rates are cut, it depends on the mortgage you signed... you%26#039;d probably want to talk to your mortgage lender to find that out.