The cost of financing acquisition of classy and high priced homes is soaring, making high-end buyers the latest victims of the weakening mortgage industry.

Wells Fargo is one of the nation's biggest mortgage lenders. Recently, it raised the interest rates on its 30-year, fixed-rate, jumbo or non-conforming loan to 8 percent last week, up from 6.875 percent for loans made through mortgage brokers. Wednesday, they stood at 7.875 percent. More are likely to join them as some also already raised their interest rates.

Jumbos are loans not covered by the $417,000 the limit observed by Freddie Mac and Fannie Mae. Freddie and Fannie don't buy loans above that cap.

The increase in interest rates would result to an increase in monthly bill for those not considered as conforming loan. For example, the monthly bill for a $600,000 mortgage would hit $4,403 from $3,942. There is an increase of $461.

Jumbo borrowers are paying a premium of a point and a half more than those who receive a conforming loan. This is about double of the previous premium spread which is about a half to three/quarters of a point.

Why should jumbos, whose borrowers often show off high incomes and assets, cost more than conforming loans? It's because Wall Street has ceased buying the loans.

Conforming mortgages bear lower risk, because Freddie Mac and Fannie Mae guarantee a market for them. In a tighter credit market, lenders are charging more for jumbos because of the added risk that it won’t sell in the investment community.

Jumbos account for 16 percent of the overall mortgage market. The implications for high-priced markets may be serious.

In some housing markets, such as most of California, much higher home prices prevail, pushing the majority of purchases into jumbo territory.

In many areas where the house prices fell below the limits, rate hikes for jumbo loans doesn’t matter at all. They can always acquire a loan covered by the by Freddie Macs and Fannie Mae’s guarantee. The median house price in the United States still stands at about $220,000.

Factoring in a 20 percent down payment, a home would have to cost more than $521,250 to trigger the higher interest rates of a jumbo loan.

According to Inside Mortgage Finance, which provides news and stats to the mortgage industry?

On an individual level, it can push potential buyers out of a market, because they generally care less about a property's price than their final monthly mortgage costs.

A buyer with a budget of $4,000 a month may be able to afford a $600,000 mortgage at 6.875 percent, but with jumbos up to 8 percent, a buyer with the same budget can only afford a $545,000 mortgage. To make up for the increased interest rate, a home seller would have to knock off nearly 10 percent from a selling price.

Buyers have to pay an extra premium, to get a mortgage in the Bay Area, Silicon Valley, Los Angeles and many other California areas. The same holds true for the New York region, Boston, Washington D.C., parts of Florida and other high-priced markets.

As far as non-conforming loans are concerned, "We are seeing essentially a frozen market," said Jay Brinkman, the Mortgage Bankers Association vice president for research and economics. "When lenders can't get a bid even on the AAA loans, it's a market that has ceased to function."

A whole class of borrowers, subprime home buyers, has already been virtually eliminated from the home-buying universe. If jumbo buyers also face much higher interest rates, many will postpone home buying plans. And that can only contribute to the pain of slumping or stagnant home markets.