Mortgage rates are at a 20-year high. Here’s what that means for monthly payments.

Source: ABCNews — 

The spike in mortgage rates this week continues a monthslong trend that has dramatically escalated the cost of home loans – but the exact price hike may surprise some homebuyers.

The 30-year fixed-rate mortgage leapt to 7.08% on Thursday, reaching heights last seen more than 20 years ago, Freddie Mac data showed.

The spike in mortgage rates continues a sharp rise over the course of this year, as the Federal Reserve has aggressively raised borrowing costs in an effort to dial back inflation.

For homebuyers, each single percentage point increase in a mortgage rate can add thousands or tens of thousands in additional costs each year, depending on the price of the house, according to Rocket Mortgage.