But there is a big gap between the average and the top yields on savings accounts, which have been hitting levels not seen since 2009 and are tracking the increase in the Fed’s rate quite closely. They mostly reflect the rates fintechs are offering to lure customers away from traditional banks, which is where most Americans have their savings accounts.

Why are mortgage rates moving up so fast then?

Mortgage lenders, which typically offer fixed-rate loans, are getting hit by both inflation and fewer buyers. To cope, they are raising their rates at a faster pace than the Fed.

Normally, mortgage rates at 6% or 7% wouldn’t be too severe for borrowers, but with home prices at unprecedented levels, the monthly payments are becoming too high for a big swath of homebuyers.

What’s happening to car loans?

Earlier in the year, credit unions that specialize in car loans stepped in with lower rates at a time when banks didn’t have the risk tolerance to extend loans.

But these lower rates couldn’t be maintained forever. Car loans are also fixed-term loans, and in addition to inflation, lenders have been wary of customers’ preference for luxury vehicles and a chip shortage that could be made worse by a recession. To account for those extra risks, they have upped their rates.

With the Fed expected to keep raising rates, expect borrowing to become even more expensive throughout 2023.

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