Mortgage costs are rising - with the average rate on a two-year fixed deal now at 5.5% - despite a recent cut in interest rates. A string of lenders, including Barclays, HSBC, NatWest and Nationwide, have increased the rates charged on new fixed deals in recent days.

The Fed has two main objectives: maintain maximum employment and contain inflation. Although one single data point is never decisive, when inflation is high, the Fed generally raises interest rates to slow demand. When the unemployment rate is high, the Fed often lowers interest rates to stimulate consumer activity.

Mortgage rates aren’t directly tied to the federal funds rate like savings and CDs. Instead, they’re tied to the 10-year Treasury yield, which is at its highest level in three months.

Experts have been saying that mortgage rates will go down in 2025, but if inflation rises under Trump, we could actually see them tick up further.

Mortgage rates, in particular, surged last year to their highest level since 2000 but have since come down alongside inflation. But it's been a bumpy ride back to the bottom in recent weeks. What, then, does this latest Fed rate cut mean for mortgage interest rates? That's what we'll break down below.

Though the Federal Reserve has been cutting interest rates, mortgage rates have been increasing or holding steady. When will potential homeowners see mortgage relief.

The Federal Reserve delivered a 0.25% interest rate cut last week. But prospective homebuyers wishing for lower mortgage rates are likely to be disappointed. While the central bank influences home loan rates,