Today the Fed cut interest rates by a quarter point. They had already alluded to having another cut. What does lowering interest rates mean? Depending on your financial position, it could be a beneficial thing or not a beneficial thing. As the Fed cuts interest rates by a quarter point, here are examples how this will impact you.

Lower mortgage interest rates

If you’re in the market to buy a home and have to take out a mortgage, you’re in luck. As the interest rates go down so does the cost of borrowing money for a mortgage. You will pay less in mortgage interest. If you already have a mortgage this could be a good time to refinance your current mortgage to a lower interest rate mortgage. Look for professional advice whether or not this is a good financial move  for you.

Lower auto loan interest rates

Similar to lower mortgage rates, auto loan rates will be lower which means you’ll pay less interest for borrowing the same amount. Lower car payments means more money in your pockets.

Lower personal loan rates

If you need to borrow money from the bank for personal reasons, getting a personal loan will be cheaper. If you are looking to open a home equity line of credit (HELOC) that will also be a little cheaper to borrow money.

Lower credit card interest rates

Making purchases on your credit card and not paying off the balance in full every time it is due will cause you to get charged interest. When the Fed interest rates are lowered, it could reflect a lower credit card interest rate which means credit card companies would charge less interest to you. My financial advice is to pay off your credit card balance in full every month so you don’t get charged any interest.

Lower savings rates

Lower interest rates is not always a financial highlight. Savings interest rates, CDs, and other accounts that earn interest will be lower. Lower interest rates means less earned interest in your savings accounts.

A quarter point may not sound a lot but the Fed previously cut interest rates by half a point. So, with this quarter point cut make is a 3/4 point rate drop. Borrowing money gets cheaper for mortgages, car loans, and personal loans. Great for consumers looking to borrow money. It’s not so great if you’re looking to earn interest on your savings account. Regardless of your financial situation, as the Fed cuts interest rates I hope it benefits you financially. If you are interested in following my journey and their journey, follow them on Instagram and email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.