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Housing loan interest? why this rise?

saividya thumbnail
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Posted: 19 years ago
#1
A sudden increase in the rates of interest in housing loan results in the increase in the term of the loan. Common man can hardly bear such increase. Why is it increasing to such an extent? Will there be a fall in the rates ?Please discuss.

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saividya thumbnail 19years

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Morgoth thumbnail 19years

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Posted: 19 years ago
#2
Well, from what I know, in general there is an increase in interest rates when there is excess demand for loans and not enough supply. They are basically discouraging people from borrowing. Also, this is the Central bank's way of trying to reduce inflation.

While this stabilizes the economy overall, people in the lower income brackets definitely get hurt.

interest rates generally go down during recessionary times when people dont have much money to pay. its easier to get a loan during such periods.



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