Mortgage interest rates are based on Mortgage Backed Securities (MBS) or bonds. If the bonds sell for a high then mortgage interest rates go down. If bonds sell low then mortgage interest rates go up. The answer is pretty simple to understand.
Bonds are affected by many economic heartbeats that influence the demand for bonds. Each week the Fed releases various economic reports that affect bond movement. Foreign markets also can affect the bond market which in return will affect mortgage interest rates. For example, when the Euro Central Bank and Central Bank of New Zealand hiked up their version of the discount rate, many investors sold off their bonds looking for a higher rate of return in their investment. Japan and China hold a good amount of our bonds, so if they decided to sell them to diversify their portfolio that could really affect the bond market and affect mortgage interest rates in a negative way.
an interest rate changes with time
The interest rate at which they lend out money changes, which changes your interest rate. Banks are a buisness and if their interest rates are lower then your interest rates, they make no money on it. The interest rate taht banks pay is changed because the rate that banks pay to the govenrment changes. Whnever the federal reserve rate changes,your interest rates can change.
As of July 2014, the national average interest rate is 5.159. However, this will change as months go by. The interest rate changes often.
Fist and fore most is NEED. Then the inflation. Third availability of money in the market i If the returns are less on the already made investments the availability of money will be less in the market. There by increase in the interest rates. Also changes in the economic condition will affect the interest rates.
An interest rate that changes based on economic factors, such as T-Bills, LIBOR, and the prime rate published in the Wall Street Journal.
an interest rate changes with time
The interest rate at which they lend out money changes, which changes your interest rate. Banks are a buisness and if their interest rates are lower then your interest rates, they make no money on it. The interest rate taht banks pay is changed because the rate that banks pay to the govenrment changes. Whnever the federal reserve rate changes,your interest rates can change.
The interest rate does affect aggregate demand. As the interest rate falls, aggregate demand increases and vice-versa.
how interest rates affect the sa economy
As of July 2014, the national average interest rate is 5.159. However, this will change as months go by. The interest rate changes often.
Fist and fore most is NEED. Then the inflation. Third availability of money in the market i If the returns are less on the already made investments the availability of money will be less in the market. There by increase in the interest rates. Also changes in the economic condition will affect the interest rates.
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yes . . depending on availability of oxygen, breathing rate changes
answer
Interest rates affect the value of holding assets compared to the value of holding money (since putting your money in an investment or a bank account is the opportunity cost to holding it as money). When interest rates increase, it is more profitable to save money than before, so the savings rate (the rate at which people save money at) increases and consumption decreases. Additionally, the interest rate also affects the net present value of the capital stock, wages, and other inputs in production, so production changes with the interest rate. Therefore, the interest rates can affect consumption and production.
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
it can be possible because it depends on your credit.