With all the political noise and turmoil going on over here it’s easy to lose sight of an important issue when talking about boating; namely the economy.
Generally speaking, it is doing quite well. On June 14, the Federal Reserve described it as such ‘the labour market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined.
Household spending has picked up in recent months and business fixed investment has continued to expand’. Later in the statement, the Federal Reserve said it had ‘approved a 0.25% point increase in the primary credit rate to 1.75% effective June 15, 2017’.
Interest rates for boat loans have been at the low end of their range for quite a time now. Currently, the low-end prevailing average rate is 4.37% for loans starting with finance amounts of $75k - $100k.
This rate is offered to those with good credit scores; always above 725. Loans in the $50k-60k (starting finance amount) range are typically 0.25% higher.
To put these rates into perspective; the National Marine Lenders Association 2016 Annual Report (from participating recreational marine lenders (banks and credit unions)) collectively reported their average loan size at $58,800 for the calendar year 2015. The 2017 Annual Report is near completion and due out soon. It is estimated that the average loan size will be approximately 2.5% to 3% higher for 2016.
While another interest rate rise of a 0.25% is expected in September or December, it should not have a dramatic effect on boat loans which is good news.
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