Ask the expert: Do you think mortgage interest rates will decrease? And are the new hybrid ARMs a good deal? When the Federal Reserve said it would begin winding down its purchase of mortgage-based securities, a program designed to keep mortgage interest rates low, the average 30-year fixed-rate mortgage went up to 4.5 percent. Advisors for Kiplinger's Personal Finance say the mortgage payment on a $200,000 home is about $115 higher than it was when the interest rate was 3.5 percent. Today's rate is still historically low, but some say it could drop slightly by year-end ... or it might rise slightly. If you need a mortgage, lock in the best rate you can get now. You can lock in your mortgage rate until you close, but the longer the lock-in period, typically 30, 45, 60 or 90 days, the greater the cost. It's generally an eighth of a percentage point for every 15 days beyond an initial 30 days, which doesn't cost anything. Remember that it's still a great time to buy because home values haven't returned to the market's peak of 2006. They are still 34 percent below their crest reports Clear Capital, a real estate data provider. Hybrid ARMs can be a good deal With a hybrid adjustable-rate mortgage, the interest rate is fixed for a number of years and adjusts annually thereafter. It's a safe choice. A 5/1 ARM may charge 3.37 percent interest for the first five years and adjusts annually after that, often to a cap of two percentage points. Hybrid ARMs are available for three, five and seven years. Some credit unions offer a 5/5 ARM. The starting interest rate remains the same for the first five years, then adjusts every five years thereafter, typically with a 2 percent cap. At Navy Federal, one of the largest credit unions, the initial interest rate on its 5/5 ARM recently was recently 2.375 percent. In five years, it would adjust to 4.375 percent, just slightly more than the average 30-year fixed rate at the time of origination.