---
title: The Fed, Inflation, and Increasing Interest Rates
description: Changes in the Federal Reserve's leadership focus could lead to a rise in mortgage rates this year.
image: https://blog.homelend.net/hubfs/Homelend_FederalReserveIncrease_HLBlog.png
---
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© 2019
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[February 07, 2022](https://blog.homelend.net/blog/archive/2022/02/07) |
[10:26 AM](https://blog.homelend.net/blog/the-fed-inflation-and-increasing-interest-rates) |
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# The Fed, Inflation, and Increasing Interest Rates
The Federal Reserve (the Fed) announced plans to start incrementally increasing the FED fund rate throughout 2022.
## **What Does That Mean for Borrowers?**
If the Fed fund rate goes up, then mortgage rates go up. The same home you could afford at current rates will have a higher monthly payment as rates increase. Similarly, the same monthly payments will get you less and less of a home as the rates go up.
Let’s look at an example:
| RATES | **3.5%** | **4.0%** | **4.5%** |
| --- | --- | --- | --- |
| **Purchase Price\*** | $450K | $450K | $450K |
| **Loan Amount** | $360K | $360K | $360K |
| **Monthly Payment (P&I)** | $1,617 | $1,719 | $1,824 |
If you’re on the fence about a home purchase or refinance, now is the time to act.
## **With Us, There is Still Time to Lock in a Great Rate**
HomeLend Mortgage is closing loans in an average of 30 days or less—three weeks faster than the national average.\*\* Other lenders may have already lost out on any opportunity to lock in and close your loan before rates increase, but not us.
Let us provide you with a free, no commitment rate quote in just a matter of minutes by visiting our [Get a Quote](https://www.homelend.net/quote/) page. Or, if you’re ready to get started, you can begin an application by clicking [Apply Now](https://apply.homelend.net/#/milestones).
```
```
\*The following loan scenario is for example purposes only: If a borrower purchases a $450,000 home, provides a 20% down payment (loan amount $360,000), and obtains a 30-year fixed-rate mortgage with an interest rate of 3.5%, the repayment terms would include a monthly principal and interest payment of $1,617. Does not include applicable taxes and insurance. The actual obligation will be greater. All loans are subject to credit and property approval. Certain restrictions may apply.
\*\*Statistics on the national average from the ICE Mortgage Technology – [January 2021 Origination Insight Report.](https://static.elliemae.com/pdf/origination-insight-reports/ICE_OIR_JAN2021.pdf?_gl=1*g6cyh1*_ga*MTU5NTM4Mzg4Ni4xNjQxOTI4MTM0*_ga_342BWS5RHH*MTY0MjAyMjEwMy4yLjAuMTY0MjAyMjEwMy42MA..)
```
```
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