Mortgage rates move in rough alignment with broader interest rate expectations, though they track the 10-year U.S. Treasury yield more closely than the federal funds rate itself. When rates rise, monthly payments on a new 30-year fixed mortgage increase substantially: on a $400,000 loan, a two-percentage-point rise in the mortgage rate adds roughly $500 to the monthly payment. Homeowners with fixed-rate mortgages are insulated from rate changes, but buyers entering the market and those with adjustable-rate mortgages feel the shift immediately. Mortgage demand tends to fall when rates climb and recover when they ease.