What You Need to Know About Interest Rates Right Now (And How They Affect Your Mortgage)

If you’ve been thinking about buying a home or refinancing, chances are you’ve been keeping an eye on interest rates and for good reason. Interest rates can significantly affect your monthly mortgage payment, your homebuying budget, and how much you’ll pay over the life of your loan.

At Morris Bank, we believe that informed borrowers make confident decisions. So whether you're actively house hunting or simply weighing your options, here’s what you need to know about interest rates right now and how they play a role in your mortgage.

What Are Mortgage Interest Rates?

Mortgage interest rates represent the cost of borrowing money from a lender to purchase a home. These rates are influenced by several factors, including inflation, the overall economy, and decisions made by the Federal Reserve.

There are two main types of mortgage interest rates:

• Fixed-rate mortgages lock in the same interest rate for the entire loan term, offering stability and predictability.

• Adjustable-rate mortgages (ARMs) typically start with a lower rate for a set period, then adjust based on market conditions.

Even small changes in interest rates can impact how much house you can afford and what you’ll ultimately pay over time.

What's Happening With Interest Rates Right Now?

Interest rates have been a major topic in the housing market over the past couple of years, and they continue to shift based on inflation trends, employment data, and other economic indicators. While rates may be higher than they were a few years ago, they’re still within historically normal ranges.

How Do Interest Rates Affect Your Mortgage?

Interest rates directly impact three key areas of your mortgage:

1. Monthly Payments – A higher rate means a higher monthly payment, while a lower rate can help you save month after month.
2. Total Interest Paid – Over a 15- or 30-year loan, even a 1% difference in interest rate can mean paying tens of thousands more (or less) in interest.
3. Your Homebuying Budget – As rates rise, your purchasing power may decrease, which means the amount of home you can afford may be lower if you’re sticking to a specific monthly payment.

Here’s a simple example:

If you borrow $250,000 at a 6.5% rate vs. a 5.5% rate, your monthly payment could differ by over $160—and the total interest paid over the life of the loan could differ by more than $30,000.

That’s why understanding how rates work is so important.

Should You Buy Now or Wait?

This is one of the most common questions we hear. While it’s tempting to hold off and wait for rates to drop, it’s important to consider the full picture. Home prices may continue to rise, inventory can shift quickly, and trying to time the market perfectly is nearly impossible.

What matters most is your long-term affordability, your personal readiness, and having a solid financial plan in place.

Interest rates are just one part of the mortgage equation, but they can make a big impact on your long-term financial goals. At Morris Bank, we make it our mission to help you understand where rates stand, how they affect your options, and what steps you can take to stay ahead.

Whether you're getting pre-approved, comparing loan types, or exploring refinancing, our team is here with personalized guidance, local expertise, and competitive solutions to meet your needs. With the right support, you can approach homebuying with clarity, confidence, and a plan built around you.

Ready to see how today’s rates fit into your next move? Contact Morris Bank and let’s take the next step together.