RESOLVING THE LEDGER
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The Federal Reserve will hold its fifth meeting of 2026 this week, and, for the first time in multiple years, the potential for an interest rate hike at the central bank\u0027s two-day meeting can\u0027t be easily dismissed. According to the CME Group\u0027s FedWatch tool, there\u0027s around a 35% chance the central bank increases interest rates this week.\u00a0While that hike, if it happens, is likely to just be by 25 basis points, it will send ripples throughout the wider borrowing space and cause elevated borrowing interest rates to rise even further. This is a serious concern for millions of borrowers but especially those looking to purchase a home or refinance their current one.After dropping by around a full percentage point in 2025, the average mortgage interest rate\u00a0spiked again in recent months against the backdrop of geopolitical tensions, overseas conflicts, a surging oil price and elevated inflation. So any relief that borrowers can secure in this space, even if it\u0027s minimal, will be welcome. But is that what\u0027s likely to happen after this week\u0027s Fed meeting? Will mortgage rates improve or can borrowers expect them to hold steady or even rise again? That\u0027s what we\u0027ll examine below.See what mortgage interest rate you may qualify for here.Will mortgage rates improve after this week\u0027s Fed meeting?Mortgage interest rates are unlikely to improve once this week\u0027s Fed meeting has wrapped up, and they\u0027re actually more likely to rise even further, absent some unpredictable decision from the bank or comments made by Fed officials afterwards that indicate a timeline for a rate cut.\u00a0While a Fed rate pause \u2013 the fifth such one since December 2025 \u2013 is the most likely outcome, even that could result in a mortgage rate increase if it precedes an inevitable rate hike when the bank meets again in September. Comments made at the post-meeting press conference from officials could also provide an indication of where rates head from here and, if it\u0027s upward, mortgage lenders may preemptively respond by increasing their rate offers to borrowers.\u00a0This is why locking a rate in the days prior to the meeting could be worth considering. If rates drop in the short-term, borrowers can always unlock their existing one and re-lock the new one. In the interim, however, they\u0027ll be protected from any rate hikes still ahead, even if they occur minus a formal Fed rate hike.Without a Fed meeting on the calendar until September, however, borrowers will also need to look toward other drivers that could cause rates to rise or fall. The 10-year Treasury yield, for example, can impact mortgage rates as can new unemployment and inflation reports that are released in August. And items related to the war with Iran, oil prices and more all have the potential to dramatically impact rates here, sometimes within the same day or overnight.So, in short, mortgage rates don\u0027t appear likely to improve once this week\u0027s Fed meeting concludes, underlining the importance of locking in one of today\u0027s imperfect options before they rise even further.Learn more about your mortgage interest rate lock options here.How to get a below average mortgage interest rate nowWhile mortgage rates in the mid to high 6% range aren\u0027t ideal now, especially compared to what was available earlier this year, there are still ways in which borrowers can secure a below-average rate. By adding mortgage interest points, for example, which serve as a fee paid to the lender to reduce their interest rate, borrowers may be able to secure a rate that\u0027s low enough to justify purchase or refinance activity.\u00a0Adjustable-rate mortgages (ARMs) also may suffice for those comfortable with a rate that will change in a few years. Shopping around for lenders, too, has been shown to result in a rate significantly below the average at the time, though that will take time, patience and can potentially impact your credit score depending on how many lenders check your credit eligibility and history.The bottom lineMortgage interest rates are unlikely to improve after this week\u0027s Fed meeting is held and they may even potentially rise further, depending on what happens in the meeting and what officials discuss afterwards. Understanding this dynamic, borrowers looking to purchase or refinance are encouraged to consider a mortgage rate lock now. They should explore their mortgage point and ARM options and shouldn\u0027t discount the advantages they can secure by diligently shopping for mortgage rates and lenders, too. With online marketplaces listing rates, terms and more all in one location, it\u0027s easy to get started right away.
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