The Federal Reserve has announced its 13th consecutive interest rate hike - the short term borrowing rate is now 4.25 percent. Over the last few years, borrowers have piled into adjustable rate mortgages to take advantage of historically low rates. Times have changed! How high are rates going, and what will happen to your monthly mortgage payments?

What if I Already Have a Mortgage?

Adjustable rate mortgages are directly tied to short term securities, such as short-term treasury yields. This means that they are extremely sensitive to interest rate changes. According to Bankrate.com, if you are holding an ARM, you almost certainly will see higher rates. That means larger monthly payments from here on out, and indeed, adjustable rate mortgages have moved upwards as of late.

What Do Interest Rate Hikes Mean for Potential Borrowers?

What do rate hikes mean for mortgage shoppers? Mortgage information provider Interest.com says with the spread between fixed rate and ARMs narrowing, it's just not worth taking out a adjustable rate loan right now.

Since mortgage rates are determined in the marketplace, it is anyone's guess exactly what will happen. The smart money is betting on higher cost ARMs.