They Say Rates Are Being Cut: So Why Is My Loan Interest Still the Same?
On the news, there's all this fuss about rate cuts, but my loan interest hasn't gone down at all. I looked into it, and apparently even variable rates have their own benchmark indices, and when those are reflected varies from case to case.
I'm debating whether to switch to a fixed rate, but I've also heard that switching now could mean higher fees, so I'm torn.
9 answers
Agreed, same here. Whenever I look at the news, everything seems to be crashing, but my bank account won’t budge.
First, check whether the variable-rate benchmark is COFIX or whatever. Many products have a six-month reset cycle, so even if rates fall, it won't be reflected until two or three months later.
Well, that's a bit... a policy rate cut doesn't mean loan rates will drop, does it? You also have to look at banks' funding costs and the spread. It's a bit premature to judge based only on a news headline.