Question

How do inflationary expectations influence interest rates on mortgage? Please elaborate by expressing your thoughts about your findings

Answer 1

Firstly understand the term inflation, Inflation is essentially the rate at which the prices of merchandise and services have raised. now, the following is the relevant findings in relation to  inflationary expectations influence interest rates on mortgage.

  Inflation has a great impact on government and business decisions and expectations. basically interest rates are assumed to be fixed, if inflationary expectations are high then it will lead to a rise in interest rates. if inflationary expectations are less then interest rates might get reduced. Therefore, inflation critically affects the price you pay for a mortgage. On the off chance that interest rates go up so as to counter inflation, anybody hoping to get another mortgage should pay more interest than they would have on the off chance that they had applied before the interest hike. On the other hand, on the off chance that you are presently on a tracker mortgage, at that point you can anticipate that your regularly scheduled installments should go up.