Bash & Co. Sotheby’s International Realty: A look at interest rates

Bash walks us through why mortgage interest rates behave the way they do.

Ben Franklin once said, “An investment in knowledge always pays the best interest.” I thought this was a nice segue into the topic for today’s column. Interest rates. A necessary evil one must pay attention to in this line of work. So today I am going to share some insight on mortgage interest rates and why they behave the way they do.

What is an interest rate?

Essentially, interest rates indicate the price you pay to borrow money. Lenders charge interest to use an asset or a line of credit. This amount is typically a percentage. On an annual basis you either pay – if you are the borrower – or receive – if you’re the lender – this percentage of the total amount of the loan. Several variables can affect mortgage rates including changes in supply and demand, inflation and global factors. All of which are in the news currently!