Attention borrowers: Interest rates are on the rise.
After the Federal Reserve’s December interest rate increase, we could see 2 or 3 more rate hikes in 2016. If that turns out to be the case, you can expect further impacts on a variety of loan products.
HELOCs and credit cards get more expensive
Home equity lines of credit and credit cards will be most directly affected, moving higher in step with the Fed’s actions. Expect home equity lines to move above 5%, and the average credit card rate to end the year near 16 1/2%. Also, snap up those 0% credit card offers while you can, because we’re likely to see fewer of those as the year progresses.
2016 will be another year of strong auto sales and plenty of credit availability, with the best rates staying below 4%. By year’s end, the average new car rate should be around 5%, and you’ll be paying 6% for the average loan on a used car.
Mixed bag for mortgage rates
Increases in fixed mortgage rates will be very modest, with the benchmark 30-year fixed spending the bulk of the year in the low 4% range and remaining well below the 5% mark throughout the year. But borrowers with adjustable-rate mortgages already in place should brace for rate increases ranging from 1/2 to 1 full percentage point.