The Quick Read: The Fed raised its target range by a quarter point on September 16, and anything tied to the short end of the curve now costs more. That includes HELOCs and adjustable mortgages. Record equity is real, but borrowing against it is the expensive part this fall. Check what you owe, what floats, and what you can trim before you draw a dollar.
This column is written as of September 28, 2026. Some sources below carry later dates, because the brief behind it was pulled on October 1.
I’ve spent eighteen years in lending. The old advice was to lock the doors before a trip. Today the bigger exposure for many owners sits inside the house, in the equity. That’s what this column is about.
Key Takeaways
- The FOMC raised the target range to 3.75%–4.00% on September 16, 2026, in a unanimous vote.
- HELOC pricing is variable and follows the prime rate. The hike passes through to open lines.
- Fixed mortgage rates follow long Treasury yields. They were rising before the Fed met.
- ICE put mortgage-holder equity at a record $18 trillion in its August release, which covers the second quarter.
- Trimming costs you already carry, such as PMI, is a cleaner first move than drawing on equity.
What Changed
Short answer: the Fed hiked, and long-term rates had already been climbing for weeks.
The Fed’s press-conference transcript from September 16 confirms the target range moved up 25 basis points. A basis point is one hundredth of a percentage point. CNBC reported a 12-0 vote and called it the first hike since 2023. JPMorgan Asset Management’s summary, dated September 17, says sixteen of eighteen Fed participants expect at least one more hike this year.
Now the mortgage market. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, with the year-earlier reading at 6.30%. Fox Business noted that was the first reading above 7% since January 2025. Freddie Mac’s release for the week of October 1 showed 7.28%, per its own announcement. Back on September 3, the survey stood at 6.71%. That’s a rise of 57 basis points in one month.
Here’s the catch. Most of that climb started before the Fed met. The survey was already rising in early September, and the hike was widely expected. The 10-year Treasury yield did a lot of the work. The Fed’s H.15 table shows closes of 5.11% on September 23 and 5.26% on September 29. CNBC reported the yield near 2007 highs on September 30.
Demand is reacting. The MBA’s survey for the week ending September 18, released September 23, showed refinance applications 62% below a year earlier. Adjustable-rate loans reached 9.8% of applications, up from 8% in the prior month’s report. Borrowers are shopping for the cheaper floating structure.
And the housing market itself is soft. NAR’s August report, released September 10, put existing-home sales at a 3.98 million annual rate and the median price at $429,100, up 1.6% from a year earlier. Inventory was 1.62 million units, a 4.9-month supply and the highest in over a decade.
What Does It Mean for Owners With Equity?
It means your equity is large on paper and more expensive to reach. Those are two separate facts.
ICE’s August Mortgage Monitor, covering the second quarter, put mortgage-holder equity at a record $18 trillion. That figure is a quarter old. A year earlier it was $17.6 trillion, a gain of roughly 2%, which fits slow price growth. ICE’s September report showed home prices up 1.5% from a year earlier, as summarized by CalculatedRisk on September 11.
The same ICE release says 47.5 million mortgage holders have $11.7 trillion in tappable equity. “Tappable” means what’s left after a lender-style cushion is kept in the home. Spread across all those holders, that works out to roughly $246,000 each on average. An average hides a lot. Many owners have far less.
Then there’s the other side of the ledger. ICE counted about 813,000 borrowers underwater, up 44% from a year earlier. They’re concentrated among FHA and VA borrowers, 2022–2025 purchasers, and the states of Texas and Florida. A record total doesn’t mean every owner is flush.
So who feels the hike most? Three groups:
- Open HELOC balances. These float with prime, and prime moves with the Fed. The increase shows up on the line you already have.
- Adjustable mortgages near a reset. Whatever your index does, you’ll feel it on the schedule in your note.
- Anyone planning to draw. The cost of the draw is higher than it was in August.
Who feels it least? Owners with a fixed first mortgage and no plan to borrow. Their payment didn’t change on September 16.
My Take
My read: the hike is the smaller story and the bond market is the bigger one. Anyone telling you the Fed “set” your mortgage rate is skipping a step. Fed policy moves short-term and prime-linked products directly. Fixed mortgages follow long yields. The NAAHQ summary of the Freddie Mac data makes the same point: the policy rate doesn’t control long-dated mortgage costs, though its path pushes them up.
The open question is how long this lasts. Sources disagree. A large national bank’s summary of the Fed’s projections points to one more hike this year. PNC expects another in early 2027, and Advisor Perspectives says markets price in hikes into 2027. I can’t tell you which is right, and no one can say with certainty. That uncertainty is the reason to look hard at anything that floats.
I also think “record equity” gets misread as “cash in hand.” It’s a balance-sheet number. It becomes cash only through a loan, and a loan has a price, a payment and a risk if values slip. With ICE noting that price gains were softening as rates rose, I’d treat equity as a cushion first and a funding source second.
Honestly, this is a toss-up for some owners. A floating line is cheap to open and painful to carry if the Fed keeps going. A fixed-rate option costs more up front but can’t surprise you. Which one wins depends on how long you’d carry the balance and how steady your income is. A short, planned draw is a different animal from a balance you expect to carry for years.
What I’d Do Now
Start with what you already owe. Then look at what you could trim. Then, only then, think about drawing.
1. List everything that floats. Pull your HELOC statement and your mortgage note. Find the index, the margin, and the next reset date. If you can’t find them, call your servicer and ask. A floating balance that you haven’t priced is your biggest blind spot.
2. Stress the balance. Pick a hypothetical. If a floating rate moves up a full point, what does that do to the monthly budget? Run it on paper at two or three levels. If the answer breaks your budget, you’ve found your limit before the market finds it for you.
3. Check for PMI. FHFA Director Bill Pulte said Fannie Mae will align with Freddie Mac’s policy that lets servicers contact borrowers who may qualify to cancel private mortgage insurance, per HousingWire. That item is dated around mid-September, so verify it. It changes who may reach out. It doesn’t guarantee removal. Cancellation still depends on the servicer and investor rules. If you bought with a small down payment and prices have risen since, ask your servicer what it would take. Of the steps on this list, this one may cost the least effort to pursue, since it starts with a single call to your servicer.
4. Shop your insurance. ICE’s September report showed property insurance up 8.7% annually. Switchers cut premiums by 6.6% while others paid 10.4% more. That budget line competes with every other cost you carry.
5. If you do plan to draw, compare structures. Our HELOC programs page carries the current guidelines, and it’s the right place to see what these products qualify on. A HELOC floats. Fixed home-equity pricing follows long Treasury yields instead. I arrange these loans as a broker, so I compare structures across the lenders we work with. Who lends, and on what terms, is subject to lender guidelines. Quotes gathered on different days aren’t comparable in a market moving this fast, so gather them on the same day.
6. If you like a rate, lock it. A lock holds the quoted pricing for a set period so you aren’t exposed to daily moves. Floating is a bet that rates fall before you close. Given six straight weekly rises, per CNN’s October 1 report, I wouldn’t make that bet with money I couldn’t afford to lose.
If you’re thinking about using equity to buy a rental, two of my earlier pieces cover the trade-offs. One asks whether a home equity loan is worth it for an investment purchase. The other asks whether you’ll make money using home equity on a rental. Read the second one before you sign anything.
One more point. Delinquencies are creeping up. ICE’s First Look for August, reported September 28, showed the national delinquency rate rising by 14 basis points from the prior month. Serious delinquencies were also up sharply from a year earlier. Prepayments fell to a 17-month low. People aren’t moving and they aren’t refinancing. Those who borrow against equity at a floating price are adding to a stretched pool.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file. Call 828-256-2183 or request a quote.
For the end-to-end picture of how these loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Did the Fed’s hike raise my fixed mortgage rate?
No. A fixed-rate first mortgage doesn’t change after it’s set. The hike hits prime-linked products like HELOCs and adjustable loans directly. It also affects what new borrowers see, but through long yields more than the Fed’s target range.
Why are mortgage rates rising if the Fed only moved a quarter point?
Because long-term yields did most of the work. Freddie Mac’s weekly survey climbed from 6.71% on September 3 to 7.28% on October 1, and the climb began before the September 16 meeting. Realtor.com’s economist, cited by Fox Business on September 24, pointed to the 10-year yield and oil.
Is record home equity the same as money I can borrow?
No. ICE’s $18 trillion figure covers mortgage holders in the second quarter. Its tappable measure keeps a cushion in the home. Your own number depends on your value, your balance and what a lender will allow, subject to lender guidelines.
Will a PMI outreach policy remove my mortgage insurance?
Not by itself. The FHFA item lets servicers contact borrowers who may qualify to cancel. Cancellation still depends on servicer and investor rules, so ask your servicer what applies to your loan.
Should I wait for rates to fall before drawing on equity?
I can’t call that for you. Sources disagree on how many more hikes are coming, and a strategist cited by CNBC on October 1 saw a pullback only if a US–Iran deal comes together. If you need funds, price a fixed structure alongside a floating one, and don’t borrow more than you could carry if the floating one rose.
The 10-year yield, not the Fed, is the number I’d watch next, because it sets the price of fixed money for every owner who wants to reach their equity.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage broker with two platforms: DSCR investor lending across 41 markets, including Washington, D.C., and consumer mortgage programs in 16 states, all arranged through wholesale lending partners. This column is written by Lendmire’s founder and reflects the market as of its publication date; program terms and availability are set by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Federal Reserve press conference transcript, September 16, 2026
2. CNBC, Fed rate decision, September 16, 2026
3. JPMorgan Asset Management FOMC summary, September 17, 2026
6. MBA weekly survey, September 23, 2026
7. NAR existing-home sales, August
8. CalculatedRisk on the ICE September report
10. HousingWire
12. HousingWire, ICE First Look, September 28, 2026
This article is part of Lendmire’s Mortgage News series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Why A Local Real Estate Broker Matters As Buyers Gain Leverage, September 2026? · September 2026: Buyers Need A Real Estate Agent As Supply Grows, Rates Climb · Listing Your Home For Sale This Fall As Inventory Climbs And Rates Rise
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.