With the cut down of interest rates to 0.5% in 2009, very few predictions were made that these rates were supposed to stay this way in UK, Eurozone and mainly the US. However, defying all the odds, the interest rates have managed to stay that way for a long way. Here is a little insight into who benefits form low Interest Rates in Houston.
People benefitting from Low-Interest Rates
Homeowners who have Variable Mortgages
Whenever someone mentions a period of low-interest rate, the people getting the most benefits have always been variable mortgage-paying homeowners. This is because they will be entitled to pay a lower monthly payment when the there is a cut down on the interest rates. This makes homeowners get the biggest component of their component chopped down significantly.
Homeowners Having Property to Sell
There are benefits that are offered to homeowners when it comes to low Interest Rates in Houston. With the mortgage market urging you to make cheap mortgage payments, the process of home buying becomes a whole more attractive and cheaper. When these low Interest Rates in Houston are prolonged for a significant period, there is a steady rise and boost in demand for houses and pushing up the prices to a level never seen before. This effect is increasingly marked once you combine this with a shortage of the houses.
Asset Prices and Shares
A number of various factors affect the share prices which includes the prospective economic growth in a country. When there is a period of low-interest rate going on, people are having assets usually look for a better rate of return. Assets like shares, at times like these, are deemed relatively more attractive since people have chances of getting better interest rates when they buy shares than placing their investments in banks.
Government Debt Interest Payments
When it comes to the government debt, the relative cost of interest payments gets greatly reduced when you have low-interest rates. There has been a steady increase in the public sector debt which enables the servicing debt costs to be lower when compared to the relative cost of interest payments.