Mortgage rates this week jump to 7.28%: what it means for buyers

Mortgage rates took a big step up this week. Freddie Mac's weekly survey, released Thursday, shows the average 30-year fixed rate at 7.28%, up from 7.03% the week before. A year ago it was 6.34%. The 15-year fixed rate averaged 6.60%, up from 6.42%. Yahoo Finance reports that rates are approaching their highest level in about three years.

A quarter-point jump in one week is large for mortgages. Rates tend to follow long-term Treasury yields, which have climbed this fall, so higher borrowing costs have spread from bonds to home loans.

For buyers, the practical effect is on the monthly payment. On the same loan amount, a higher rate means a higher payment, so it is worth rerunning the numbers on any home you are considering. If you already have a quote, ask your lender how long your rate lock lasts and what happens if your closing date slips.

Freddie Mac's survey is an average, and the rate you are offered depends on your credit, your down payment and the loan type. Comparing written loan estimates from more than one lender on the same day gives you a fair side-by-side view.

For current owners, there is little reason to act on this week's news. If you have been thinking about a refinance, it can help to note today's rate as a benchmark and check back when the next survey comes out on Thursday.