• This is a partial transcript from "Your World with Neil Cavuto," December 14, 2004, that was edited for clarity.

    NEIL CAVUTO, HOST: He's done it again: up, up and away. Alan Greenspan (search) and his buddies hike interest rates. But in case you think five is the charm, forget about it. A year from now, rates could be double where they are now.

    Just because it was expected doesn't make it easier to swallow. Shorter-term interest rates up another quarter point today. That means the prime rate is up another quarter point, too. Your adjustable mortgage rate likely is going up another quarter point, and any other loan you have attached to that is up another quarter point, as well.

    Before you lose heart, I want you to take note, there is a way to play the higher rate game, and "Your World" will be your guide.

    Here to help is Chris Larsen. Chris is the CEO of E-Loan.

    Chris, I know in the mortgage area, if you've got an adjustable rate mortgage, you're going to feel the pinch. What are your customers doing?

    CHRIS LARSEN, CEO, E-LOAN (EELN): Well, you know, it's interesting. Obviously, short term rates went up as expected, but the interesting thing is long term rates over the last couple of months, and even today again have actually gone down.

    So, I think you actually are seeing kind of a mixed shift, if you will, definitely of people moving from short term rates into more affordable, longer term rates, while that lasts...

    CAVUTO: Chris, could I stop you there?

    LARSEN: Sure.

    CAVUTO: When you say, "while that lasts" — you have doubts?

    LARSEN: I do. I actually think maybe long-term rates, perhaps, should be a little higher. The yield curve is definitely flattening. And I wouldn't expect that to last. You never know. But I think consumers should definitely take advantage of this window.

    You know, 10-year now is about 4.10 — that's pretty attractive. So perhaps an opportunity to lock in those lower rates. And perhaps move away from, of course, the high cost credit card debt, and even some of the adjustable home equity debt into more fixed rate home equity to replace that short term or dangerous evil debt, if you will.

    CAVUTO: All right, Chris. We should say you're an encyclopedia with this stuff. But you're referring to the 10-year note, which has stayed very low, in the low 4 percentage point neck of the woods.

    Let me ask, are you noticing this shift away from the adjustable rate mortgages, adjustable equity loans, that sort of thing, into something more fixed, and this has been going on since we've been seeing these rates move up?

    LARSEN: Two big trends. I think you're definitely seeing a movement to sort of the threes, the fives and the 30s. Three year fixed, five year fixed and intermediates. Those have also come down, came down again today.

    So that's really the sweet spot for consumers.

    And then, of course, a major trend of consumers getting rid of their credit card debt and moving that into home equity debt, because property prices have gone up. You have a lot of equity. There's tax advantages there.

    And it just seems there's more of a willingness now for the industry to lend to consumers, and that, I think, that also might not last. So take advantage of that while you can.

    CAVUTO: All right, Chris Larsen, all good tips. We appreciate it. The man who runs E-Loan, Chris Larsen in San Francisco.

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