How the recent interest rate hike could impact you

LYNCHBURG, Va. (WSET) — The federal reserve raised interest rates again. So, how will this rate hike impact you?

Variable rate loan payments will go up considerably, according to Nancy Hubbard, the Dean of the School of Business at the University of Lynchburg.

To give you an example of the difference it makes on a mortgage, Hubbard said if you took out a $300,000 mortgage this time last year, you would have paid $93,500 in interest over 30 years.

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If you take out that same mortgage today the interest would have doubled. So, you'd pay $187,000 in interest on it.

She also said the rate hike will impact credit card payments. Hubbard said credit card payments are the highest they've been since 1996.

She also said rising rates will impact your car and student debt payments that don't have a fixed rate.

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She adds if you have a home equity line where you've borrowed money to maybe make improvements on your home, that will also go up.

Hubbard offers this advice to borrowers.

"The advice for any of these is if you do have any of these variable rate expenses or borrowings, to get a personal loan that's at a fixed rate and consolidate those so that the interest rates don't continue to go up," Hubbard said.

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She also adds there is a silver lining in a couple of areas.

Also, If you have a savings account, you'll actually get more interest.

"If you do have cash in a savings account, shop around and you can actually get between two and 3% interest on it," Hubbard said. "It doesn't sound like a lot but it's a lot better than zero which is what you have been getting for the past few years."

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Hubbard believes the rate hikes so far haven't done much to fight inflation.

She also expects the federal reserve to raise rates again until they can get things under control.