Failure to reach a debt limit deal is likely to send interest rates on mortgages, credit cards and everything else climbing.

“Increases of multiple percentage points wouldn’t be out of the question” if the government can’t pay its bills, said Jacob Channel, senior economist at LendingTree, an online lending marketplace

Mortgage rates have been fairly stable lately. Freddie Mac estimates that someone receiving a 30-year, fixed rate mortgage would get an interest rate averaging 6.39% last week.

That’s down from the November peak of 7.08%. But a debt limit breach could change the rate quickly.

Jordan Levine, senior vice president and chief economist at the California Association of Realtors, saw rates already inching towards 7% in the state, and would not rule out a 8% rate in the future in the event of a prolonged default.

If not he did not see rates climbing that high.

Here’s what that means: In California, the median price of a home sold in California last month was $815,000.

If someone borrowed 80% at 6.39%, the monthly mortgage payment, including taxes and fees, would be $5,011. If the rate hit 7%, it would climb to $5,275.

At 8%, the buyer would pay $5,721.

Biden, McCarthy keep talking

President Joe Biden and House Speaker Kevin McCarthy have engaged in closed-door negotiations for days over how to suspend or increase the nation’s $31.4 trillion debt ceiling. So far, there’s been no reported public progress.

The government reached the debt limit in January, but Treasury has been using what it calls “extraordinary measures” to keep paying its obligations.

Treasury Secretary Janet Yellen has warned repeatedly this month that it’s likely to exhaust those measures as soon as June 1.

Even the threat of such a breach has pushed up sent certain interest rates. Because of the heightened risk, Treasury securities’ interest rates have risen slightly recently.

“Global investors are already on edge,” said a report last week by Moody’s Analytics, a nonpartisan economic research firm.

The increase has not rippled into the consumer markets, and may not for a while.

“Evidence on this tells us that if the breach is a short-lived one as in the previous occurrences — say one week or so — there would be relatively little impact,” said Gokce Soydemir, Foster Farms endowed professor of business economics at California State University, Stanislaus.

“The more prolonged it is — say more than a month to three months ,” he said, “the greater the likelihood of a sudden increase on mortgages and credit cards become.”

Just how much of an increase would depend on how quickly banks would be affected by the government seeking cash and not being able to meet credit obligations.

Channel thought that, depending on how a breach is managed, rates would probably start rising immediately.

“As for how high they could go,” he pondered, “that’s tough to say. But increases of multiple percentage points wouldn’t be out of the question.”

Rates have been steadily going up on mortgages and credit cards for months, the result of the Federal Reserve raising its key rate 10 times in the last 14 months.