Interest Rate

Interest Rate = Interest Rate

Simplified Definition:
An interest rate is the percentage added to a loan, or paid to you on savings. It is a tool used by central banks to influence spending and inflation.

What does it mean for you?

Mortgage payments or car financing may increase with rising interest rates.
Returns on savings accounts and savings products may increase when interest rates rise.
Frequently Asked Question:
Does raising interest rates mean prices will drop immediately?
Answer:
Not immediately. Interest rate effects take time; because they gradually change people's and businesses' decisions (borrow less/spend less), then price pressures ease over time.