Current Mortgage Rates

Mortgage rates explained

A mortgage rate is the annual percentage you pay on the money you borrow, and on a fixed-rate loan it is the single number that fixes your principal-and-interest payment for the next 360 months. Because that payment is a flat dollar amount, small rate differences compound into large sums. On a $400,000 loan over 30 years, 6.00% costs $2,398.20 a month and $463,353 of lifetime interest, 6.50% costs $2,528.27 and $510,178, and 7.00% costs $2,661.21 and $558,036. Each half-point of rate is worth about $130 a month and roughly $47,000 across 360 payments, which is why the same borrower shopping the same week can see a four-figure difference in lifetime cost.

The rate cards at the top of this page are estimated national averages for 2026: 6.875% on a 30-year fixed, 6.125% on a 15-year fixed, 6.250% on a 5/1 ARM, 6.500% on FHA, and 6.250% on VA, each shown with its APR and its recent daily move. Those are reference points, not quotes. Your own rate is set by your credit profile, your equity, the property, the loan program, and the lender you choose, and it reprices every day the bond market is open. A borrower with a 760+ score and 20% down prices below the average card; a 660 score at 95% loan-to-value prices above it.

Two numbers sit beside every rate. The interest rate is the cost of borrowing applied to the outstanding balance. The APR — annual percentage rate — restates the same loan with discount points, origination charges, and other financed closing costs folded in as one annual figure, which makes it the fairer number for comparing lenders. On the 30-year card the rate is 6.875% and the APR is 7.012%, a gap of 0.137 percentage points that represents financed lender costs. As a working rule, every $1,000 financed adds about 0.025 percentage points of APR on a 30-year loan, and every discount point you buy removes about 0.25 percentage points from the note rate.

Structure matters just as much as the headline number. Fixed loans hold one rate to payment 360; adjustable-rate mortgages start lower and then reprice on a published schedule; 15-year loans price 0.50 to 0.75 points under the 30-year because the lender's money is at risk for half the time; and government-backed FHA and VA loans usually price slightly under conventional because part of the default risk is insured. Every figure on this page is an illustrative 2026 estimate, not an offer to lend.

How mortgage rates are determined

The most common misunderstanding in this market is that the Federal Reserve sets mortgage rates. It does not. The Fed sets the federal funds rate, which is the rate banks charge each other for overnight loans, and that number directly moves credit cards, HELOCs, auto loans, and savings yields. Mortgages are funded by the bond market instead: investors price 30-year loans against the 10-year Treasury yield and against mortgage-backed securities (MBS) issued from pools of home loans. When the Fed cuts, the cut has usually been priced in for weeks, and if the same week brings a hot inflation report or a strong jobs number, the 10-year yield rises and mortgage rates go up anyway. The two move together only loosely, and only over long stretches.

The 10-year Treasury is the anchor. A 30-year mortgage rate typically sits 1.5 to 2.0 percentage points above it, and that spread is not fixed: in calm markets the gap narrows toward 1.5 points, and in volatile markets MBS investors demand more yield and the gap widens — a swing that can add 0.15 to 0.40 points to your rate without anything changing in your file.

• Credit score. Lenders price in tiers, typically 0.25 to 0.50 percentage points apart. On the illustrative 2026 ladder below, 760+ prices at 6.375%, 700–759 at 6.625%, 680–699 at 6.875%, 660–679 at 7.125%, and 640–659 at 7.500% — a 1.125-point spread from top to bottom.
• Loan-to-value. Equity is the lender's cushion. Putting 20% down keeps the loan at 80% LTV and earns the best tier; below that, expect a 0.25 to 0.50 point add-on, with mortgage insurance priced separately when you stay under 80%.
• Points. A discount point costs 1% of the loan amount — $4,000 on $400,000 — and buys about 0.25% of rate. Points are a prepaid bet on staying in the loan, not a free discount.
• Loan type. Conventional, FHA, VA, USDA, and jumbo loans all carry their own rate cards. VA and FHA are government-backed and commonly price 0.125 to 0.375 below conventional; jumbo loans price slightly higher and are more sensitive to credit and assets.
• Loan term. A 15-year fixed prices 0.50 to 0.75 below the 30-year (6.125% versus 6.875% on the cards above). ARMs start 0.50 to 0.75 lower as well, then adjust — the discount is deferred risk, not a permanent saving.
• Property type and occupancy. A primary residence is the cheapest to price. A second home adds roughly 0.125 to 0.50, a condo or a two-to-four-unit building adds more, and an investment property sits at the top of the card.
• Lock period and lender capacity. A 30-day lock is usually free; 60 and 90-day locks cost points. When refinance volume spikes, lenders widen margin and raise requirements, so the same file can price differently in March than in October.

How to read and use this page

1. Start with the rate cards. Each card shows the estimated national average rate, the APR, and the recent daily change for that loan type — use them as a benchmark, not as your quote.
2. Read rate and APR together. A lower rate with a much higher APR means the discount is being paid for with fees; a close rate and APR pair usually means fewer financed costs.
3. Locate yourself in the credit-score table below to see where a well-qualified borrower starts and what each tier down costs on your loan amount.
4. Price points with the points table if a lender offers them, and run your hold period through the mortgage points calculator before you pay any.
5. Convert the rate into a payment: enter your loan amount and the rate you are quoted in the mortgage calculator, then add taxes, insurance, and PMI to see the full payment.
6. Collect quotes from three to five lenders on the same day, with the same loan amount, points, and lock length, and compare APR across all of them.

How your mortgage rate becomes a payment

Your lender divides the annual rate by 12 to get a monthly rate, then solves for the level payment that exactly retires the balance over the term:

M = P × [ r (1 + r)ⁿ ] ÷ [ (1 + r)ⁿ − 1 ]

where M is the monthly principal and interest payment, P is the loan amount, r is the monthly rate (annual rate ÷ 12), and n is the number of payments. APR uses the same payments solved backwards: it is the rate that makes the present value of all 360 payments equal the net cash the lender actually hands you after fees.

Worked example: $400,000 at 6.875% for 30 years

Step 1: monthly rate r = 6.875% ÷ 12 = 0.005729167. Step 2: n = 30 × 12 = 360 payments. Step 3: the compounding factor is (1 + 0.005729167)³⁶⁰ = 7.819450. Step 4: 400,000 × 0.005729167 × 7.819450 = 17,919.57, and 7.819450 − 1 = 6.819450. Step 5: M = 17,919.57 ÷ 6.819450 = $2,627.72 a month. Step 6: $2,627.72 × 360 = $945,979 repaid, so lifetime interest is $945,979 − $400,000 = $545,979. Your first payment is $400,000 × 0.005729167 = $2,291.67 of interest and only $336.05 of principal, because interest is charged on the full balance before any principal is removed.

Worked scenarios

The tables below are illustrative 2026 estimates for a $400,000 loan on a primary residence with 20% down unless stated otherwise. They are not quotes: actual pricing depends on the lender, the property, and the day you lock.

Credit-score tiers: what your profile is worth in rate

Read the table in two directions. Down the first column, identical files except for score differ by $301.38 a month and $108,496 over 360 payments — the gap between the 760 tier and the 640 tier is larger than most people's entire yearly savings rate. Across the tiers the steps are 0.25 points, except the last step from 660–679 to 640–659, which is 0.375 points because below a 680 score the agency loan-level price adjustments step up sharply and many lenders add their own credit overlays on top. Moving one tier up — 680–699 to 760+, worth 0.5 points — saves $132.24 a month and $47,606 of interest, which is usually the highest-return 90 days a borrower can spend before applying.

Discount points and rate locks

Points break even at almost exactly 60 months in every row, because each point buys the same 0.25% and costs the same 1% — the arithmetic does not care how many you buy. What changes is the cash you hand over at closing: 2 points is $8,000 on a $400,000 loan, and that money is gone whether or not you keep the loan six years. Buy points only when you expect to hold past break-even, and compare them against putting the same cash toward a larger down payment, which lowers the balance and can also remove PMI.

Rate locks price the same way — you are buying time, not rate:

A 30-day lock is the cheapest only if you close on time. On a purchase with a seller who needs 60 days, a free 30-day lock means paying an extension at the worst possible moment — or floating into a market that has moved against you. Match the lock to the realistic closing date, ask for the extension schedule in writing before you apply, and ask whether a float-down (keeping a lower rate if the market improves before closing) is available and what it costs.

What moves mortgage rates in 2026

• The 10-year Treasury yield. The benchmark for 30-year pricing; a sustained 0.25-point move in the yield usually shows up in rate sheets within a few days, worth roughly $65 a month on $400,000.
• Fed policy, indirectly. The funds rate drives short-term credit, not mortgages. What moves rates is how the market prices the next six to eighteen months of policy — cuts that are already expected rarely push mortgage rates lower when they arrive.
• Inflation prints. CPI and PCE releases, with shelter and services carrying the most weight. A hot number lifts yields because bond investors demand compensation for losing purchasing power.
• The labor market. The monthly jobs report and weekly claims can move the 10-year 10 to 15 basis points in a session, and lenders reprice their rate sheets the same afternoon.
• The MBS spread. The extra yield mortgage bonds must pay over Treasuries widens in volatile markets and can add 0.15 to 0.40 points to your rate on its own.
• Lender capacity and margin. When refinance volume spikes, lenders raise margin and lengthen turn times; when pipelines are thin, pricing improves and 60-day locks get cheaper.
• Treasury supply and housing inventory. Heavy government issuance raises the term premium, while the lock-in effect — millions of owners holding sub-7% mortgages — keeps existing-home supply thin and the market reactive to small yield changes.

Tips for getting the best rate in 2026

• Shop inside a 14-day window. Get estimates from three to five lenders within about two weeks so the inquiries are scored as one, and take every quote on the same day. Rate sheets change daily; comparing Tuesday's quote with last month's flyer hides the real difference.
• Normalize to APR and points. A 6.875% quote with $2,000 financed prices at about 6.92% APR; a 6.625% quote with one point at $4,000 prices at about 6.72% APR. Ask each lender for rate, APR, points, and lock length in the same message.
• Raise your score 60 to 90 days before applying. Pay revolving balances below 30% (10% is better), do not open or close accounts, dispute any reporting errors, and hold off on new inquiries. Moving from the 680–699 tier to 760+ is worth $132.24 a month on $400,000.
• Match the lock to the closing date. Confirm lock length, the extension fee schedule, and whether a float-down is available — before you apply, not while you are in underwriting.
• Buy points only past a five-year hold. Every points option on this page breaks even near 60 months. If a job move or refinance is likely sooner, keep the cash and take the higher rate.
• Price the whole program. FHA's 6.500% carries a 7.450% APR because the upfront premium is financed; VA's 6.250% carries a 6.875% APR and no mortgage insurance; a 15-year saves $333,529 of interest but adds $774.78 a month. The rate card is one line of the comparison.
• Do not sign around a future refinance. Closing costs run 2% to 5% of the loan, or $8,000 to $20,000 on $400,000, so recapturing a rate drop takes years. Buy a payment you would keep through a flat market.

Common mortgage rate mistakes

• Assuming a Fed cut means cheaper mortgages. The funds rate governs overnight bank lending. Mortgages follow the 10-year Treasury and MBS market, so rates have gone up in the weeks after a cut more than once. Watch the bond market, not the headline.
• Comparing quotes that are not like-for-like. Different points, different lock lengths, and quotes taken weeks apart manufacture a false winner. One point is $4,000 on $400,000 and moves the rate 0.25%, so a "cheaper" quote can actually be the more expensive loan.
• Comparing rate without APR. The rate ignores origination and discount fees. Two lenders can quote 6.75% and differ by 0.15 points of APR — about $40 a month on $400,000 — because one folds costs into the price and the other does not.
• Locking on the wrong timeline. A free 30-day lock on a 60-day closing is not free: extensions run 0.125 to 0.25 point per 15 to 30 days, or $500 to $1,000 each on $400,000, paid at the moment you have the least leverage.
• Shopping one lender, or only your own bank. The same borrower with the same file sees 0.25 to 0.50 point spreads across lenders — $65 to $130 a month on $400,000. A relationship discount of 0.125 point does not cancel a wider gap.
• Optimizing the rate while the payment is stretched. A quarter-point improvement saves about $65 a month, but qualifying on a payment with no margin for taxes, insurance, and PMI is a far larger risk. Check the full PITI in the affordability calculator first, then optimize the rate.

Frequently asked questions

Does the Federal Reserve set mortgage rates? No. The Fed sets the federal funds rate for overnight bank lending, which directly moves credit cards, HELOCs, auto loans, and savings yields. Mortgage rates are set by the bond market — the 10-year Treasury yield and mortgage-backed securities. A Fed cut can arrive alongside higher mortgage rates if investors are pricing stronger growth or renewed inflation.

What is a good mortgage rate in 2026? For a 30-year fixed with a 760+ score, 20% down, and a primary residence, anything in the low-to-mid 6% range is competitive — the illustrative tier table starts at 6.375% against a 6.875% national average. A quote more than about 0.5 points above average is usually credit, loan-to-value, or fees rather than the market.

How much does my credit score change my rate? Moving from the 640–659 tier to 760+ changes the illustrative rate from 7.500% to 6.375%, a 1.125-point difference. On a $400,000 loan over 30 years that is $301.38 every month and $108,496 of lifetime interest. Tiers in between are typically 0.25 to 0.5 percentage points apart.

Should I pay discount points to lower my rate? One point costs 1% of the loan — $4,000 on $400,000 — and buys about 0.25% of rate, worth $66.48 a month at current illustrative pricing, so break-even lands near 60 months. Points pay only if you keep the loan past five years. Run your hold period through the mortgage points calculator.

How long should I lock my interest rate? Locks run 30 to 90 days. A 30-day lock is usually free but leaves no margin if the appraisal or closing slips; 60 days is the common choice and often costs 0.125 to 0.25 point, or $500 to $1,000 on a $400,000 loan. Confirm length, extension cost, and float-down policy before you apply.

Is a 15-year loan worth the higher payment? Lenders price 15-year loans 0.50 to 0.75 below the 30-year — 6.125% versus 6.875% on the cards above. On $400,000 that is $3,402.50 a month instead of $2,627.72, and total interest falls from $545,979 to $212,450 — $333,529 saved for $774.78 more each month.

Can an ARM beat a fixed rate right now? The 5/1 ARM card shows 6.250% against 6.875% for the 30-year fixed, a 0.625-point discount worth $164.85 a month on $400,000 for the first 60 payments. After year five the rate resets to an index plus margin, subject to caps. Model the worst-case payment in the ARM calculator before choosing it.

Why is the FHA APR so much higher than its rate? The FHA card shows a 6.500% rate and a 7.450% APR because the upfront mortgage insurance premium is financed into the balance, and APR counts it. VA shows 6.250% with a 6.875% APR because VA loans carry no monthly mortgage insurance. Compare APR within a program, and read the loan estimate line by line across programs.

Related calculators

• Mortgage Calculator — full PITI payment, total interest, and amortization schedule for any rate you are quoted.
• Mortgage Points Calculator — break-even month for paying points against taking the higher rate.
• Refinance Calculator — closing-cost break-even when a new rate is worth refinancing into.
• 15-Year Mortgage Calculator — payment and lifetime interest on the shorter term priced 0.50 to 0.75 lower.
• Compare Mortgage — line-up side-by-side quotes with the same loan amount, points, and lock length.
• Affordability Calculator — what payment your income supports before you shop a rate.