Regarding interest rates: home loans vs car loans?

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So I am watching a real estate show, and the people disclosed the total cost, percentage rate and monthly payments for the house they chose. Their percentage was 8% for thier home loan… That seems high to me. My only point of reference for a percentage rate on a loan is our auto loan. I dont remember the exact percentage for our car loan, but it was 5 something percent. Are car loan interest rates generally lower or higher than home mortgages, or are they comparable?

3 Comments
  1. Reply
    Dreamer.
    May 14, 2011 at 11:38 pm

    All loans are generally affected by the mortgage rates. Housing is what drives this economy is it is down then everything else goes down.

  2. Reply
    My Take on It
    May 14, 2011 at 11:38 pm

    The show could have been a rerun from months or years back or, could be the type of financing they chose. Could also be what their credit score was. 8% sounds like a rate for someone who has marginal credit.

  3. Reply
    OldJimmy
    May 14, 2011 at 11:48 pm

    That may have been an old show, or the person had a marginally good credit record. Mortgage interests rates right now are in the 5’s.

    Car loans are generally a little higher in rate than a mortgage, unless you get one of those special incentive deals directly from the auto manufacturer. Bank rates today are more in the 7 to 7.75 range. Main reasons for this are that they are short(er) term loans so the bank doesn’t have as many years to collect enough interest to cover their costs of making the loan, and often the collateral (the car) is immediately worth less than the loan balance unless a big down payment is made (rapidly depreciating asset).

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