If you are close to buying a home or refinancing one, it may be a good idea to lock in the lowest fixed rate available to you. One way to do that: make borrowing requirements more stringent. Whether rates on mortgages, home equity lines of credit and HELOCs rise or fall from here, securing a home loan may become tougher since banks, wanting to bolster their defenses against potential adverse events like a run on deposits, may want to take fewer risks and preserve more cash. The average HELOC rate, meanwhile, hit 8%, about double where it was in mid-April last year, according to Bankrate. The average home equity loan rate was running at 7.94% as of April 26, well above the 6.4% recorded in mid-April last year. Meanwhile, the variable rate on a home equity line of credit or a fixed rate on a home equity loan will rise because their formulas are directly tied to the Fed’s rates. (Photo by Liu Jie/Xinhua via Getty Images) Liu Jie/Xinhua/Getty Images The Fed raised interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, lifting the target range of the federal funds rate to 4.75-5 percent.
Federal Reserve Chair Jerome Powell Rear attends a press conference in Washington, D.C., the United States, on March 22, 2023.
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