Trends in macroeconomic conditions and policy have helped to boost longer-term interest rates, including mortgage rates, over the past year. This has important implications for the wealth gap between white and Black or Hispanic households. The standard narrative is that higher interest rates, especially when combined with higher house prices and lower incomes, reduce homebuying affordability for Black and Hispanic households relative to white households. And this, in turn, implies that these households of color will find that achieving homeownership has become more difficult, thereby widening the racial wealth gap. This report illustrates that under a higher mortgage rate regime, the pace of principal reduction is slower over most of the life of a 30-year fixed-rate mortgage. Using data covering purchase loans on one-to-four family mortgages across the city of Newark, NJ, we also show that Black and Hispanic households buying in Newark obtain higher mortgage rates relative to their white peers and therefore pay more in interest for a slower principal reduction. In response, we suggest that more local policymakers assess the benefits of interest-rate buy-downs to improve affordability, close racial wealth gaps in housing, and better insulate historically marginalized communities from macroeconomic shocks.