US Mortgage Rates Climb, Raising Borrowing Costs for Homebuyers

US mortgage rates have climbed, increasing the cost of borrowing for homebuyers. The latest data from the Mortgage Research Center, reviewed by Fortune on October 5, shows the average rate for a 30-year fixed conforming loan reached 7.542%. This marks an increase from the previous day’s report, making home purchases more expensive for borrowers comparing fixed-rate options.

The average 15-year fixed conforming rate also rose to 6.737%. Fortune’s figures highlight how these rate changes impact long-term costs. For example, a $300,000 loan at 7.542% would accumulate roughly $458,258.29 in interest over 30 years. At 6.737% over 15 years, the interest estimate drops to about $177,461.53, illustrating the trade-off between shorter terms and higher monthly payments.

Other loan types saw increases as well. The 30-year jumbo rate rose to 7.691%, while government-backed loan rates also moved higher. The 30-year FHA rate reached 6.925%, the 30-year VA rate climbed to 7.023%, and the USDA rate remained unchanged at 6.962%. These loans have different eligibility requirements, such as FHA loans being insured by the Federal Housing Administration and VA loans available to military members and veterans.

Mortgage rates do not always align with the Federal Reserve’s benchmark rate. However, market observers often watch the federal funds rate for direction. The Federal Open Market Committee raised this rate to 3.75%, 4.00% during its most recent meeting on September 15-16, with the next meeting scheduled for October 27-28.