Speculation on PenFed rates at Christmas time?

[Adcampo]

My car should deliver in December. Planning on using PenFed payment saver. Rates are really good now. Any thoughts if they'll drop, rise or stay the same at the end of the year? No rate lock available for payment saver.

[Clark_Kent]

No one here knows the answer to that question and it's not even worth speculating. We're talking about the end of 4Q 2015 and we're currently in October. Interest rates are determined by the bank's pricing model that factors in several components...cost of funds, capital allocation, spread on each credit approved to provide a desired return on capital, and the list goes on.

[afadeev]

Originally Posted by Adcampo

My car should deliver in December. Planning on using PenFed payment saver. Rates are really good now. Any thoughts if they'll drop, rise or stay the same at the end of the year? No rate lock available for payment saver.

Rates have been slowly rising all year.

I got 60 month at 1.49% in March from DCU (best rate at that time), it went to 1.74% this summer, now up to 1.99%. PenFed's rates are similar or higher.

If the Fed lifts rates in late October or December, they will likely go higher still.
If you know how to model implied probability of a rate hike from 30 day Fed Funds futures, do it, and keep updating the model to guide your expectations.
Otherwise, just go with yesterday's implied 95.4% probability of a 0.25% rate hike.

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[CosmosMpower]

Penfed got up to 2.25 at some point for 60 months on new cars and is back down to 1.99 now.

[Adcampo]

I've read the Feds may increase rates on long term loans, but that it would have little impact on short term money.