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When Interest Rates Go Up, What Goes Down?


64839737 - hands holding cardboard on bokeh background with text: interest rates

The Federal Reserve raised interest rates ¼ percent on Wednesday, and indicated they were going to raise rates three times in 2017. Since the election, rates on a typical 30-year mortgage have increased by about three quarters of a percent to 4.38%


The increase in rates will ultimately impact those who have already borrowed using an adjustable rate  Home Equity Line of Credit (HELOC) or an Adjustable Rate Mortgage (ARM) because the interest on these loans go up at the rates rise. Unfortunately, more and more lenders are now starting to aggressively market these adjustable loans. Please don’t get trapped into one of these!


This is the reason that we have consistently encouraged people to only get fixed rate loans if you have to borrow. When you have an adjustable rate loan, your interest rates are free to float higher and this can be very expensive and even risky.


Also, when rates go up, the value of bonds go down, and the longer the maturity of the bond the more it declines on value. In fact, investors worldwide have already lost trillions of dollars of value with the current increases in rates.


But there is also good news . . . for savers! The higher rates will translate into higher interest earned on your savings. For this I am very grateful, especially for seniors who were faithful to save, but have been earning next to nothing for almost eight years.

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Update from Howard 5/31

Hi Friends,

I hope everyone had a great Memorial day weekend.  I am very appreciative for the men and women who have and are currently serving and protecting our country.  I served in the Navy and was stationed in Vietnam for a year, so I know of the sacrifice these men and women have made and are making for this country.  I am very thankful and grateful for each one of them. May God bless them and their families!

Here’s what is happening . . .

How we doing with our saving? I couldn’t believe it! Read an article that the average percentage of income a person saves in China is 39%; in India it’s 35%; while the average in the USA is only 3.9%. Think about it! The average income in China and India is very small compared to America . . . yet they are saving so much more of their income!

Global: Two key members of our Compass Global Alliance, Andres Panasiuk from Latin America and Richard Samuel from India joined the USA leadership. God is moving in a remarkable way in both places. The Navigating Your Finances small group study was launched in English in India last month. Later this month it will be launched in Hindi and Tamil. They are projecting that during the next 12 months, they will have about 25,000 people participate in the study. God is also blessing Andres and the work in Latin America in an amazing way.

We are scheduling a trip to India in November . . . let’s see, should I communicate to them in English, Hindi or Tamil? Well, this time I’ll speak in English…lol!

Materials: The 9 week Navigating Your Finances God’s Way small group study is on the way from the printer! This is the traditional small group study that has been improved and refreshed. We are praying that the Lord will use it powerfully in the lives of many people.

Family: Spent several days in Gainesville, Georgia, with my 94 year old mom and my siblings. It was a precious time, but very emotional and fatiguing. Mom’s health is clearly failing.  We decided to try to gather again to celebrate her 95th birthday on September 20th. Pray that the Lord will continue to draw my mom close to Himself in a very tender way.

Warmly in Jesus,


Howard Dayton is the Founder and CEO, Compass – finances God’s way. For more information about Howard, please click HERE.