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Things to watch for if interest rates go up

Interest rates have been holding steady this year, but that is likely to change. As the pandemic wanes and the economy returns, experts expect that interest rates will increase in 2022 and 2023. Here’s what to watch for if that happens.

Variable Rates Increase

If you have a variable loan in the form of a mortgage, personal loan or car loan, their rates could jump quickly. If you can, try converting your variable loan to a fixed loan.

Savings Accounts Might Move

There’s a chance that banks and credit unions will increase the return rates on savings accounts. This would be great for everyone.

Credit Card Rates Could Jump

As Opens a new windowUS News reports, the average credit card interest rate for new applicants is 18.04 percent. For existing accounts, the average interest rate is 15.10 percent. Expect both of those numbers to increase. However, if you’re paying off your balance each month (which you should be!), this increase won’t matter too much.

Mortgages Will Get More Costly

If you’re shopping for a new home when the interest rates rise, expect to pay more for your mortgage. If you’re already a homeowner with a fixed rate mortgage, you won’t be bothered by the rate increase. In fact, you can likely congratulate yourself for locking in at historic lows.