HECM Interest Rate Pain & Perspective

The immediate pain is real but don’t overlook the long-term ramifications

The Federal Reserve is frantically pulling at its last lever to curb runaway inflation, which is a series of increases in the central bank’s benchmark lending rate. 

For many, this comes as no surprise. On this show, I predicted that the Fed would have to enact more drastic interest rate hikes and more often than announced. And that’s exactly what happened last Wednesday when the Federal Reserve’s Board of Governors voted to increase its benchmark lending rate by .75 basis points. The largest single increase since 1994. And the Fed has signaled another three-quarter point rate hike is likely in July. 

Consequently, the index that’s keyed to the federally-insured reverse mortgage has been climbing. In fact the index has more than doubled since March 1st of this year.

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