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What Homeowners, Consumers Can Do About Higher Rates

Consumers looking at the rise in interest rates may wonder what impact it will have on their wallets.

Treasury prices have been falling sharply, pushing yields--which move in the opposite direction--higher. The 10-year Treasury note yield, considered the benchmark interest rate, is near its highest level in five years.

The good news is that long-term interest rates don't affect your credit card, home-equity line of credit or car-loan rate.

"Money market rates are also unaffected and even on certificates of deposit, it will take awhile before we see improvement," says Greg McBride, senior financial analyst with Bankrate.com. CD yields remained flat this week with the average one-year coming in again at 3.77% and the five-year holding firm at 3.96%.

Home loans are a different story. Mortgage lenders have an eagle eye on the 10-year Treasury. Since the average mortgage lasts slightly less than 10 years, investors tend to view bundles of mortgages as a similar investment. As a result, mortgage rates tend to move in the same direction as the 10-year Treasury.

And the rise in the Treasury yields has helped push the average 30-year, fixed mortgage rate to its highest level in nearly a year, rising to 6.84% this week, according to a Bankrate.com national survey of large lenders. The last time the 30-year, fixed-rate mortgage was higher was July 19, 2006, when it was 6.89%.

So what should homeowners and potential buyers do now?

1) If you're in a market for a house now, you may want to attend a few more open houses this weekend to step up your house-hunting efforts before rates rise further.

2) If you have an adjustable-rate mortgage, consider refinancing now! Rates on the 5-year adjustable rate mortgage have shot up as well - to about 6.67%. If your rate adjusts or resets even higher, you could be in trouble. "Fixed rates are still a better deal than holding on to an adjustable," McBride says.

3) Find out how more about how this rate adjustment could effect you by logging on to the Survivor's Guide to ARM Resets.

Sharon Epperson is a CNBC correspondent and the author of The Big Payoff: 8 Steps Couples Can Take To Make The Most Of Their Money - and Live Richly Ever After.

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