With fixed mortgage rates under 7% and a down payment of nearly $30,000, their monthly payments would have been less than $800. But by the time the young couple narrowed their list of prospective purchases last month, rates had jumped to more than 8%, and the best loan they could find called for monthly payments of more than $900.

The 1 1/2-point increase has added about $154 to the monthly cost of a new $150,000 mortgage, and it slammed the brakes on a long refinancing boom. Refinancings account for just 10% to 15% of lenders' new loan business today, down from about 70% earlier in the year, according to the Mortgage Bankers Assn. of America.

When [Rick Maholchic] and Cheryl Maholchic first started shopping for a loan to refinance their $275,000 Agoura home in February, they hoped to get a fixed-rate loan at about 7% to replace their adjustable-rate mortgage.