In 2011, the epicenter of the economic crisis shifted from the United States to Europe. At the time, the interest rate for a 20-year mortgage floated between 3.4 and 4.6%. These rates have since remained in steady decline.

Interest rates are like the 'rent' paid for money. In other words, it is the payment collected by the person or entity lending the money. In this case, it's the bank that pays its creditors, meaning some of its depositors and shareholders.

When rates are low, borrowers have the option to take on debt at low cost, which naturally gives a boost to spending and even investments. However, remember that in this situation, the price of assets (property or bonds, for example) goes up. On the other hand, when rates are high and credit is expensive, loans and purchases taper off and asset prices drop.

BNP Paribas SA published this content on 19 January 2018 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 January 2018 09:39:07 UTC.

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