Federal Reserve cuts rates

Federal Reserve cuts in the federal funds rate have an unpredictable impact on long-term mortgage rates. So it's impossible to know for sure when -- or even if -- rates will fall as a result of the Fed's emergency rate cut.

How soon could it affect you?
Impossible to know


Fixed-rate mortgages usually do not change in response to cuts in the federal funds rate. However, adjustable-rate mortgages may be more sensitive to Federal Reserve rate decisions, especially if the spread between the federal funds rate and the London Interbank Offered Rate -- more commonly known as LIBOR -- narrows.

Depending on the exact nature of their mortgage, some people with ARMs may see their rate adjust downward the next time the mortgage resets.