Getting a loan will be pricier

 

Apart from what the Federal does on interest rates, economists and officials have been predicting higher mortgage rates for several months, as credit programs wind down that artificially spurred cheaper loans.

As the economy begins to mend, the cost of borrowing money for a big purchase could start to increase. This could be the end of low interest rates when you consider expanding your business or purchasing more landscape equipment.

Mortgages, in particular, have flirted with record lows during the recession. Credit card rates have been bouncing upward. While auto loan rates are expected to stay low for a little while longer, they can’t stay low forever.

The Federal Reserve has played a key role in keeping the cost of borrowing so low, through the so-called federal funds rate, a benchmark that determines the interest paid by consumers and businesses on a wide variety of loans. That has been near 0 percent since December 2008, as the central bank worked to spur greater lending and economic activity.

But as the economy heals, that rate is sure to come up, as will the cost of a lot of loans – although economists assure that borrowing costs won’t rise until the economy is ready for it.

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