INDIANAPOLIS — 2021 was a year of low interest rates, but what if you need to buy a house or a car this year?
The good news is that interest rates shouldn't change too much, but there are things to pay attention to.
BankRate's chief financial analyst Greg McBride anticipates the Federal Reserve System to impose two hikes this year to help cool things down. But even with those increases, McBride expects mortgage rates to stay below 4%. As for auto loans, the prediction is that the average five-year new car loan will be 4.4%, and the average four-year used car loan will be a little less than a half-percent more at 4.85%
If you're someone with credit card debt, you'll be affected by the hikes because your card uses a variable rate, meaning it changes.
"So when interest rates go up, your credit card rate goes up and pretty quickly, typically within one to two statement cycles," McBride said. "And so this is the time to really get aggressive about paying down that debt, accelerating the repayment because of the fact that that cost is only going to go up."
If you're a saver waiting for your money to finally earn more interest, don't get your hopes up. McBride said most banks are sitting on a pile of deposits, which means there's no reason to try to attract more.