TXviking wrote:When I was a kid, my savings account earned over 10%. But my dad's mortgage was at 14%.
Banks will always charge more for loans than they pay for deposits. Low APY on savings is frustrating, and even the ~1% a few online banks offer don't amount to much. But along with 2.5% APR on my mortgage? I'll take it.
Very strong position. Very very true. It's obvious they'll always charge more than they pay, but the mortgage rate is very relevant for someone that has one or even someone that wants one. Someone that has no mortgage and doesn't borrow regularly doesn't get the benefit of the current low interest rate.
Very true. However, most consumers have more debt than savings. Mortgages are common, but even if you rent, your landlord likely has mortgage expenses that figure into setting the rent. Many people have car loans. And while credit card APRs are generally much higher than prime (they seem to be bucking the general trend of rates trending downwards,) they are generally set based on the prime rate.
I think my overall conclusion is that in a debt-driven society, low interest rates are a net win for the average consumer, even though it does feel like it punishes frugality and fiscal responsibility.