Editor’s Note: This is an updated excerpt from a story that originally ran on March 22, 2023.

New York CNN  — 

The 30-year fixed rate mortgage has run north of 6% all year.

Good question.

The 30-year fixed rate mortgage has run north of 6% all year.

For the week ending April 27, it averaged 6.43%, up a bit from 6.39% the week before. A year ago, the 30-year fixed-rate was 5.10%.

Mortgages aren’t tied directly to Fed rate decisions, but rather to movements in the 10-year Treasury yield, the benchmark rate for many consumer loans.

As to where mortgage rates go next, look to inflation. If inflation keeps dropping, then mortgage rates are expected to drift lower too. But don’t expect them to go back to 3%.

Meanwhile, the variable rate on a home equity line of credit or a fixed rate on a home equity loan will rise because their formulas are directly tied to the Fed’s rates.

The average home equity loan rate was running at 7.94% as of April 26, well above the 6.4% recorded in mid-April last year.

The average HELOC rate, meanwhile, hit 8%, about double where it was in mid-April last year, according to Bankrate.

Lending is expected to tighten

Whether they rise or fall from here, securing a home loan may become tougher since banks, wanting to bolster their defenses against potential adverse events like a run on deposits, may want to take fewer risks and preserve more cash. One way to do that: make borrowing requirements more stringent.

If you are close to buying a home or refinancing one, it may be a good idea to lock in the lowest fixed rate available to you.

That said, “rushing into the purchase of a big-ticket item like a house or car that doesn’t fit in your budget is a recipe for trouble, regardless of what interest rates do in the future,” said Texas-based certified financial planner Lacy Rogers.

If you’re already a homeowner with a variable-rate home equity line of credit, and you used part of it for a home improvement project, McBride recommends asking your lender if it’s possible to fix the rate on your outstanding balance, effectively creating a fixed-rate home equity loan.

If that’s not possible, consider paying off that balance by taking out a HELOC with another lender at a lower promotional rate, McBride suggested.