2007-09-03 04:25:53 · 8 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
The simple answer is that your mortgage provider gets the extra interest.
But of course it is not as simple as this. You need to consider where your mortgage money came from.
A traditional building society will raise the money from its members. As interest rates have risen the rates offered to investors will have to be increased to prevent investors moving their money to other investments. So in this case other investors receive the extra interest.
Other lenders will obtain their mortgage funds in the wholesale market but the same principle applies.
So in general it is savers who will benefit although I cannot discount the possiblitlity of the banks or building societies creaming off a percentage.
2007-09-03 11:09:38 · answer #1 · answered by tringyokel 6 · 0⤊ 0⤋
The money people pay in interest gos tho the lenders not the government. In principle when the fed raises interest rates they are decreasing the money supply by selling government bonds in the open market taking money out of the system. The fed continuously buys bonds with newly created money, expanding the money supply to accommodate economic growth, so probably raising rates just means they will buy less. The bond purchased from the public has the effect of retiring the government debt.
2016-04-03 01:10:44 · answer #2 · answered by ? 4 · 0⤊ 0⤋
A building society borrows the money that it lends for mortgages. So savers with it, or with banks, get higher interest rates on their savings.
2007-09-03 04:36:37 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The building society investors or the bank and its depositors.
2007-09-03 04:34:04 · answer #4 · answered by galyamike 5 · 0⤊ 0⤋
your lender gets the extra money. what they do with it is entirely up to them - keep it to increase their profits; use it to help give better rates to those who have savings with them; use it to help make products for new customers more competitive
2007-09-03 04:42:40 · answer #5 · answered by hlarseven 1 · 0⤊ 0⤋
It sounds like you have a loan that is adjustable. And the rate is tied to LIBOR?
2007-09-03 10:05:10 · answer #6 · answered by DallasLoanGuy 2 · 0⤊ 0⤋
It is alot more complicated than that. I can try but it is very complicated chances are you wont understand.
2007-09-03 04:31:55 · answer #7 · answered by Davie Boi 2 · 0⤊ 0⤋
The people you borrowed it from.
2007-09-03 04:36:39 · answer #8 · answered by andy muso 6 · 0⤊ 0⤋