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Isaac M. Gabriel quoted in article “Money Talks: Here’s How the Interest Rate Hikes Impact Your Personal Finances”

AZ Business Magazine

Isaac M. Gabriel, a partner at Quarles & Brady in Phoenix, explains that while mortgage lending rates are not set by the Fed, mortgage rates often rise as the Fed raises rates. "When mortgage rates rise, mortgage payments simply become more expensive," Gabriel says.

For example, a $300,000, 30-year mortgage, with a 4 percent interest rate would have a monthly payment of $1,432. If the rate rises to 5 percent, the payment increases to $1,610, a difference of $178 per month. "The end result is individuals may not be able to afford a larger mortgage loan," Gabriel says. "Similarly, individuals with adjustable rate mortgages (ARMs) will see their mortgage payments increase as a result of any increase on the mortgage lending rates.