The Impact of Rising Interest Rates on Your Mortgage

Interest rates are always changing. While headlines often focus on rate increases, it’s important to understand what those changes actually mean for homeowners and prospective buyers.

Here’s what you should know.

If You Already Have a Fixed-Rate Mortgage

If you currently have a fixed-rate mortgage, your interest rate and principal-and-interest payment generally remain the same for the life of your loan. Rising market rates typically won’t change your existing mortgage payment.

However, changes to property taxes or homeowners insurance may still affect your monthly payment if those expenses are included in your mortgage escrow.

If You’re Planning to Buy

Interest rates influence purchasing power because they affect monthly mortgage payments.

That doesn’t necessarily mean you should postpone your plans. Housing needs don’t always wait for market conditions, and there may be financing options available that fit your goals.

If You’re Considering Refinancing

Refinancing isn’t only about lowering your interest rate. Depending on your financial goals, homeowners may refinance to:

• Change your loan term
• Consolidate higher-interest debt*
• Access home equity for eligible expenses
• Remove mortgage insurance in certain situations

A conversation with a mortgage professional can help determine whether refinancing aligns with your goals.

While no one can predict future interest rates, you can prepare by:

• Maintaining strong credit habits
• Reducing existing debt when possible
• Building savings
• Understanding your financing options before you need them

If you’re wondering how today’s rates could impact your plans, we’re here to help answer your questions and explain your options.

*For refinance transactions, be aware that by refinancing your existing loan, your total finance charges may be higher over the life of the loan.