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Mortgage rates have pushed higher each of the last four weeks. For a 30-year loan term, they’re now up around 5%1 and are expected to soon push through that level.

The Federal Reserve is expected to raise its benchmark interest rate two more times this year, with the next increase coming at the conclusion of their meeting on Wednesday.

With no reason to think that the current trend toward upward mortgage interest rates won’t continue, it makes sense to take advantage of these interest rates while you can. If you’re in the market to purchase, you may be under the impression that you need to find a house before you can lock your rate.

We’ll get into the details below, but before we do, let’s talk about why you might want to take advantage of the current interest rate environment now before rates rise.

Where the Market Is

In the mortgage market, all signs point to higher rates in the near future. The 10-year U.S. Treasury note recently breached the 3% level. Although it’s not set in stone, the rate on a 30-year fixed mortgage tends to run around 2% higher than this key treasury rate.

In addition to this, as mentioned above, the Federal Reserve has its own benchmark interest rate that controls short-term lending. This short-term borrowing rate has been increased seven times since the end of 2015 and currently sits at a level of 1.75% – 2%. The target range is expected to increase by another 0.25% at the conclusion of the next meeting of the Federal Reserve Open Market Committee on Wednesday.

Although there’s not a direct relationship between interest rates for longer-term loans like mortgages and these shorter-term borrowing rates, there’s a very positive correlation that when short-term rates go up, longer-term rates tend to increase as well.

While there’s no guarantee, many market participants also expect the Fed to increase short-term interest rates in December as well.

If you can lock your rate, it’s certainly a good time to do so.


Does this sound good to you? You can apply online with Rocket Mortgage® by Quicken Loans. One of our Home Loan Experts would also be happy to help you get started if you give us a call at (800) 785-4788. If you still have questions, you can let us know in the comments.

1 According to interest rates published on September 20, 2018, on FreddieMac.com.

Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, debt, property, insurance, appraisal and a satisfactory title report/search. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Quicken Loans’ control, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close, you will receive $1,000. This offer does not apply to new purchase loans submitted to Quicken Loans through a mortgage broker. Additional conditions or exclusions may apply. Verified Approval within 24 hours of receipt of all requested documentation.

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