What the Fed’s interest rate hike means for mortgage rates


The Federal Reserve lifted the federal funds rate recently by a quarter percentage point to a range of 1.5 percent to 1.75 percent. Two more rate hikes are expected this year. Three are expected in 2019, rather than two as initially projected.


What does this mean for mortgage interest rates????



-Adjustable rate mortgages moving past their fixed period are likely to rise in the near future.

-HELOCs (Home Equity Lines of Credit) are likely to see a rise as well, as the rate is usually tied to the Prime Rate

-Fixed Rates (30 Year, 15 Year, etc…), are not directly affected the same way.  However, the Feds Fund Rate does weigh influence on the longer fixed mortgages over time. 

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It’s all relative to future economic/social occurrences, but it is not unreasonable to think that we are in an environment that could show rates move well past 5 by the end of the fiscal year.


Important things to keep in mind as you start looking into buying a home. 


-Fixed Mortgage Rates in the 4’s, 5’s, and even 6’s…are GOOD RATES!  We have seen rates over the past six to seven years that are unnatural in comparison to a normal market.  It is far unlikely that we will ever see rates that low again.  If we do, refinance opportunities are available to get you to the lower rate at that time. 


-Talk to your mortgage professional.  A diligent and knowledgeable professional will be able to explain to you the immediate rate scenario. 

-Do not roll the dice.  If you are quoted a specific rate that you are comfortable with, lock it in.  This year has proven that floating in hopes of catching an eighth lower in rate is dangerous.  It is almost certain that interest rates will continue to rise.

-If you wish to compare interest rate quotes amongst different mortgage companies, do so within in the same day.  Interest rates could bump up at any given moment.

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Written by:

Donnie Bernacchi
Sr. Mortgage Banker | Sales Manager

P: 847.414.1555 | F: 630.757.4214
Company NMLS# 222982 | Individual NMLS# 230036