What the Fed will cost you

Mortgages

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Mortgage rates tend to track movements in the yields on various U.S. Treasurys and other indexes, which price in anticipated Fed rate hikes.

If you already have a 10-year or 30-year fixed-rate mortgage, Fed hikes won't affect you.

But if you have an adjustable rate mortgage (ARM), you're more vulnerable if you've only locked in your rate for a short time or it's due to adjust.

Mortgage Rates

30 yr fixed	3.80%
15 yr fixed	3.20%
5/1 ARM	3.84%
30 yr refi	3.82%
15 yr refi	3.20%

Take a 1-year, $200,000 ARM that will readjust by December. If the Fed indicates it will raise rates again and the 1-year Treasury rate rises 25 basis points, the 1-year ARM rate may jump from 4.1 percent now to 5.02 percent. That would mean an extra $100 in monthly payments.

But if you have a 5/1 or 7/1 ARM (in which you lock in a rate for five or seven years), a Fed hike won't affect you.

"The longer the fixed rate, the more insulated you'll be," said Keith Gumbinger, vice president of mortgage information provider HSH Associates.

Interestingly, if you have a 3/1 or a 5/1 ARM that's due for adjustment, Gumbinger said, you may actually see your payments fall since rates for 3/1 and 5/1 ARMs were higher several years ago.

If you're shopping for a new mortgage -- fixed or adjustable -- you'll pay a bit more. Mortgage rates have climbed off their record lows, although not as much as expected partly because inflation has been tame.

In mid-March, you could have gotten a $200,000, 30-year fixed at 5.55 percent for $1,141.84 a month. Today, its rate would be 5.87 percent and cost $1,182.43 per month, Gumbinger said.

Mortgage rates are likely to continue climbing if the bond market anticipates more rate hikes.