Whether you’re interested in securing a personal credit card, purchasing a vehicle or diving into a home mortgage, you’ll need to educate yourself on interest rates. In Northern Fulton County, it is possible to shop around for your needs and get an interest rate that will suit your budget.
What is a good interest rate?
The best rate you can get depends largely on what type of loan you need.
- A mortgage. Currently, 2016 mortgage rates for a fixed 30-year loan range from as low as 3.78 to 4.05 percent. For a fixed 15-year loan, rates were considerably lower, varying from 2.06 to 3.29 percent.
- A credit card. The Federal Reserve estimates that the interest rate average is about 12.09 percent for credit cards. If you tend to hold a balance on your card, you may get a higher rate of 12.79 percent. However, credit card interest rates often vary, with the low rates coming in at 5.25 percent and the high rates topping out at 24.90 percent.
- An auto loan. The interest rate you’ll pay for a new vehicle will also vary. You may be able to secure a loan with a national average interest rate (4.34 percent). However, this will depend on the length of your loan, your credit score, as well as your loan source (credit unions tend to offer lower interest rates than traditional banks).
How interest rates affect your payments
Across the board, the lower the secured interest rate— the less you’ll pay on debt accumulated from your home, car or credit card purchases.
- For example, if you have a 4 percent interest rate on a $200,000 mortgage, you’ll pay $955 per month.
- At 6 percent, the payment goes up to $1,199.
- At 8 percent, you’ll pay nearly $1,500 per month. That’s more than $500 out of your pocket every time you make a mortgage payment.
Consider how these payments add up over the life of a 15- or 30-year mortgage.
The same holds true for personal loans, car loans and credit card debt. It pays to shop around and secure the lowest interest rate possible. And, of course, you should always put as much cash down on your home or car – and pay cash for purchases whenever possible – to minimize the amount of money you put toward the debt.
If you’d like help figuring out the best interest rate for your next home or vehicle purchase, or if you’d like to shop around for a credit card, contact BrightPath Mortgage today for a free consultation!
Image Source: Flickr