Rates Jumped While You're Under Contract. What Now?

You found the house. Your offer was accepted. The inspection's done, and you've already decided where the couch goes.

Then Thursday's headline: mortgage rates hit 7.28%, the highest since November 2023. Your phone is full of articles, and a relative is telling you to wait.

Before you do anything, take a breath. A rate headline and your actual payment are two different things. Most buyers find the real number is a lot smaller than the headline made it feel.

Buyers don't walk away from the math. They walk away from not knowing it.

First question: is your rate locked?

Everything else depends on this. If your rate is locked, this week's headline doesn't touch your loan. Your rate stays where it was locked as long as you close before the lock expires.

If you aren't locked yet, you're "floating," and your rate moves with the market until you lock. That isn't automatically bad. Plenty of buyers float on purpose early in a contract. But you should know which one you are, and the lock expiration date if you have one.

If you don't know, that's your first call. It takes your lender about thirty seconds to answer.

What the jump actually costs

Here's the move on a $300,000 loan, the kind of number a lot of Capital Region buyers are carrying right now.

Same loan, three rates

$300,000 loan on a 30-year fixed, principal and interest only. Property taxes, homeowners insurance and any mortgage insurance are additional and don't change with the rate. Rates are Freddie Mac weekly national averages. Illustration only, not a quote.

Rate	When	Monthly P&I
6.34%	One year ago	$1,865
6.95%	About three weeks ago	$1,986
7.28%	The week of October 1, 2026	$2,053

If you wrote your offer in mid-September and you're floating, the difference is about $67 a month. That's real money, about $800 a year. For most buyers who were approved with room to spare, it isn't the difference between affording the house and not.

Your taxes and insurance don't change with the rate. In the Capital Region, where property taxes are a big piece of every payment, that means your total monthly payment moved by a smaller percentage than the headline suggests.

Where it can actually matter

The one place a rate jump has teeth is your debt-to-income ratio, the share of your monthly income that goes to the new house payment plus your other debts. If you were approved right at the edge, $67 a month can push you over it.

You want to find that out this week, not the week of your closing. If it's tight, there are almost always ways to fix it, and every one of them is easier with time on the clock.

Three ways to bring the payment back down

ONE

Lock now, if you haven't

If you're floating and the payment still fits, locking takes the guesswork off the table. Nobody can promise where rates go next week. What a lock gives you is a number you can plan around. Ask how long the lock runs and whether it covers your closing date with some cushion.

Ask: "Does my lock run past my closing date, and what does an extension cost if we slip?"

TWO

Ask the seller for a credit toward a buydown

Instead of renegotiating the price, a seller credit can pay to temporarily lower your rate. On a 2-1 buydown, your rate is 2 points lower the first year and 1 point lower the second, then settles at the note rate.

On a $300,000 loan at 7.28%, that's about $1,662 a month in year one and $1,853 in year two, before the full $2,053 kicks in. The cost is roughly $7,100, and a seller credit can cover it, so it usually means less out of your pocket.

Program limits on seller credits apply. Have your lender run it before your agent asks.

THREE

Buy the rate down permanently

Discount points are money paid at closing to lower your rate for the life of the loan. They make the most sense if you plan to stay in the house long enough to earn the cost back in lower payments. Your lender can show you the break-even month in writing.

Rule of thumb: the longer you'll stay, the better points look.

Call your lender this week if…

Check any that apply. One is enough to make the call.

You don't know whether your rate is locked
Your lock expires within a week or two of your closing date
You haven't seen your updated monthly payment since rates moved
Your approval was tight on debt-to-income to begin with
Your closing date has moved, or might
You're thinking about backing out, and haven't run the numbers yet

Penny's Corner

Words of wisdom, from under Dad's desk

Dad says most people panic before they look at the number. I panic about the vacuum before I look at it too. It's usually just sitting there.

Under contract and nervous about the rate? Send me your scenario and I'll tell you the same day whether it's a payment problem or just a headline problem. Call or text 518-396-7392.

Run my numbers → Payment calculator →

FAQ

Does a rate increase affect me if I'm already under contract?

Only if your rate isn't locked. A locked rate holds as long as you close before the lock expires. If you're floating, your rate moves with the market until you lock, so a jump like this week's can raise your payment. Ask your lender which one you are.

How much does a quarter-point rate increase add to my payment?

On a $300,000 30-year fixed loan, moving from 6.95% to 7.28% adds about $67 a month in principal and interest. Taxes and insurance don't change with the rate. The exact figure depends on your loan amount.

Can a seller pay to lower my mortgage rate?

Often, yes. A seller credit can fund a temporary buydown, like a 2-1, or permanent discount points. On a $300,000 loan at 7.28%, a 2-1 buydown costs roughly $7,100 and lowers the payment by about $390 a month in year one. Each loan program caps how much the seller can contribute.

Should I back out of my contract because rates went up?

Not before you see the real number. For most buyers who were approved with room, the payment change is modest. Backing out can also cost you deposits and fees depending on your contract. Have your lender rerun your payment first, then decide.

What happens if my rate lock expires before closing?

You can usually extend the lock, often for a fee, or re-lock at current market rates, which may be higher or lower. If your closing date might move, ask about extension costs now so there are no surprises.

More answers: all 469 mortgage questions, answered →

Rates jumped while you're under contract. Here's what actually changed.