Mortgage rates have already run up sharply since the election — rates on a 30-year fixed mortgage now stand at about 4.25 percent, up from 4 percent late last year<br />and 3.75 percent in early November, according to Inside Mortgage Finance.<br />The typical credit card holder who is carrying a balance will quickly see annual interest charges rise to 16.75 percent from 16.5 percent.<br />“This is a rising tide that lifts all boats, and you’re going to feel it in equal magnitude wherever you sit on the credit spectrum.”<br />Still, rather than focusing on the imminent move by the Fed, experts are warning<br />that the long-term trajectory for borrowing costs will steadily move higher, especially if the central bank follows through on signals that it will raise rates twice more this year.<br />Short-term rates have crept higher since the Federal Reserve embarked on its path to normalize monetary policy in December 2015,<br />but savers wouldn’t know that: The typical savings account currently pays 0.1 percent per year.<br />And because the outstanding balances of mortgages are so much larger than they are for credit cards<br />or home-equity loans, the ultimate impact of higher mortgage rates is much more noticeable.<br />But because credit card debt is so much more expensive than other forms of credit, like a mortgage<br />or a car loan, an already expensive way to borrow will become even more burdensome.<br />“I don’t think there’s any question that mortgage rates are heading to 5 percent or higher,” Mr. Cecala said.<br />“We’ve been spoiled,” said Mr. Cecala, noting that during the housing boom before the recession, 30-year mortgage rates stood at 6 percent.
