Locking in your mortgage interest rate this September could be beneficial. Despite current elevated rates, taking action now may save you money in the long run.
Rising Mortgage Interest Rates
September 2026 was expected to bring relief in mortgage rates. The Federal Reserve had reduced rates three times at the end of 2025, suggesting a more affordable homebuying environment. However, mortgage rates defied expectations, increasing instead. As of September 1, the average rate is 6.87% for a 30-year mortgage, according to Zillow. This is over a percentage point higher than six months ago.
Reasons to Lock Your Rate
The Potential for Higher Rates
The Federal Reserve may raise interest rates this month. The CME Group’s FedWatch tool indicates a 66% chance of a hike on September 16. Locking in a rate now means shielding yourself from potential increases. If rates drop before closing, you can unlock your rate or choose to refinance later. Missing today’s rate could disrupt your homebuying plans.
Pre-Announcement Rate Hikes
Lenders might not wait for the Fed’s official decision. They may increase rates based on inflation or unemployment reports expected before the Fed meets. Locking in now protects you from these potential rate changes.
A Series of Rate Hikes
The September hike might not be isolated. The Fed has more meetings scheduled for October and December, and another increase could signal more hikes to come. Locking your rate helps fix your budget and clarify how much home you can afford.
Conclusion
Locking a rate close to 7% might not appear ideal. Yet, with possible Fed hikes on the horizon and rates already on the rise, it makes sense to act now. Understand your rate options, as choices can vary between lenders. Acting promptly could be a cost-effective step in securing your homebuying future.
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