3 Reasons Banks Raise Fixed Mortgage Loan Rates

The fixed mortgage loan is one of the most popular types of mortgages in the market today on account of its consistency and fixed payment schedule. Yet the rates that banks charge for these lending instruments vary all the time. Here are a few reasons that banks raise fixed mortgage loan rates. 

1. Federal Reserve

The Federal Reserve sets the interest rate at which they lend money to banks. This helps determine what interest rate the banks will lend at. If the Fed raises their interest rate, the banks will raise theirs as well.

2. Market

The market for mortgage loans also has a big impact on what they charge for interest. If there is a huge demand for fixed mortgages, they will raise the rate to accommodate this demand. If there is not much demand in the marketplace, they will lower the rates. 

3. Individual Credit Factors

The rates that you personally receive will also be affected by your credit rating. If you have a bad credit rating, the interest rate from the bank will be raised.

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