Today’s Mortgage Rates

Mortgage rates dominate headlines every time they tick up or down a quarter point. But most people fundamentally misunderstand what drives them. It’s not the Fed funds rate. It’s not inflation (directly, anyway). And it’s definitely not the President. Here’s how rates actually work, what they’re doing now, and how to make sure you’re getting the best deal available.

Where Rates Stand in 2026

As of early 2026, here’s the general range for borrowers with strong credit (740+):

• 30-year fixed: 6.4%-6.9%
• 15-year fixed: 5.6%-6.1%
• 7/1 ARM: 5.9%-6.4%
• 5/1 ARM: 5.7%-6.2%
• FHA 30-year: 6.2%-6.7% (plus MIP)
• VA 30-year: 6.0%-6.5%

These numbers move daily. The rates your lender quotes will depend on your credit score, down payment, loan amount, and property type. A borrower with a 680 score will see rates 0.5-1.0% higher than what’s listed above.

Next Steps

Ready to lock in a rate? Use our mortgage calculator to see exactly how today’s rates translate into your monthly payment. Then compare offers from our top-rated mortgage lenders. If you haven’t started the process yet, our pre-approval guide walks you through everything you need to get your first quote. Considering refinancing at current rates? Read our complete refinance guide.

What Actually Drives Mortgage Rates

The 10-Year Treasury Yield

This is the single biggest factor, and most people don’t know it. Mortgage-backed securities (MBS) compete with Treasury bonds for investor dollars. When the 10-year Treasury yield rises, mortgage rates rise to stay competitive. When Treasuries fall, mortgages follow. The correlation isn’t perfect, but it’s the closest thing to a leading indicator you’ll find.

The spread between the 10-year Treasury and the average 30-year mortgage rate has historically been about 1.5-2 percentage points. During 2023-2024, the spread blew out to 2.5-3+ points due to market uncertainty. As that spread normalizes, rates can drop even if Treasury yields stay flat. Some analysts believe this normalization is the most likely source of rate relief in 2026.

What About the Federal Reserve?

The Fed controls the federal funds rate — the overnight rate banks charge each other. This directly affects short-term rates (credit cards, HELOCs, auto loans) but only indirectly affects mortgages. When the Fed cuts rates, it signals an easing cycle, which tends to push Treasury yields down, which pulls mortgage rates down. But the relationship isn’t one-to-one, and sometimes mortgage rates move opposite to Fed actions.

Translation: “The Fed cut rates by 0.25%” doesn’t mean your mortgage rate drops 0.25%. It might drop 0.1%, stay flat, or even rise if other factors (inflation expectations, MBS demand) are working against you.

Inflation Expectations

Investors buying MBS want compensation for expected inflation — if they expect 3% inflation over 30 years, they demand higher yields. When inflation expectations fall, rate pressure eases. The market prices in future inflation through the “breakeven rate” (the difference between nominal Treasury yields and TIPS yields). Watch this, not last month’s CPI number.

Rate Types Explained

30-Year Fixed

The standard. Same payment for 360 months. You pay more in total interest compared to shorter terms, but the predictability is valuable. On a $350,000 loan at 6.5%, your monthly P&I payment is $2,212 and you’ll pay $446,244 in total interest over the life of the loan. Yes, you read that right — you’re paying more in interest than you borrowed.

15-Year Fixed

Higher monthly payment, dramatically less total interest. Same $350,000 at 5.8%: monthly P&I of $2,933 (33% more per month) but total interest of $177,974. That’s $268,270 less in interest than the 30-year. The 15-year is the right choice if you can afford the payment without stretching your budget.

Adjustable Rate Mortgages (ARMs)

A 7/1 ARM means the rate is fixed for 7 years, then adjusts annually based on an index (usually SOFR plus a margin). The initial rate is typically 0.5-0.75% lower than a 30-year fixed. This makes sense if: you’re confident you’ll sell or refinance within the fixed period. It doesn’t make sense if you’re buying your forever home and plan to stay 20+ years — you’re taking rate risk for a modest initial savings.

Arms have caps that limit how much the rate can increase at each adjustment and over the life of the loan. A typical cap structure is 2/2/5 — meaning: max 2% increase at first adjustment, max 2% at each subsequent adjustment, max 5% over the life of the loan. On a 5.9% starting rate with a 5% lifetime cap, your worst case is 10.9%. Know your caps before choosing an ARM.

How to Get the Best Rate

Credit Score: The Biggest Lever

The difference between a 680 and 760 credit score on a $400,000 loan can be 0.5-0.75% in rate. At 6.5% vs 7.25%, that’s $170/month — $61,200 over 30 years. If your score is below 740 and you have time before buying, improving your credit is the highest-return activity you can do.

Quick credit wins: pay down credit card balances to below 10% utilization (often adds 30-50 points in 60 days), don’t close old credit cards (kills your average account age), dispute errors on your report (affects 1 in 5 reports), and avoid opening new accounts or making large purchases in the 6 months before applying.

Shop at Least 3 Lenders

Freddie Mac research shows that borrowers who get just one additional rate quote save an average of $1,500 over the life of the loan. Getting five quotes? Up to $3,000-$6,000 in savings. And all credit pulls within a 14-45 day window (depending on the scoring model) count as a single inquiry. There’s no credit penalty for shopping aggressively.

Get quotes from at least one of each: a mortgage broker (they shop wholesale lenders and often find the best rates), a direct lender or bank, and a credit union (often have the lowest fees but limited product range).

Consider Discount Points

One point costs 1% of the loan amount and typically reduces your rate by 0.25%. On a $350,000 loan, one point is $3,500 and saves roughly $55-$65/month. Break-even: about 54-64 months (4.5-5.3 years). If you’re staying longer than the break-even period, points save you money. If there’s any chance you’ll refinance or sell within 5 years, skip them.

Lock Your Rate at the Right Time

Rate locks typically last 30-60 days. Longer locks (90+ days) cost more — either a higher rate or a lock extension fee. Lock when: you have an accepted purchase contract (don’t lock before you’re under contract — if the deal falls through, you lose the lock), rates are acceptable to your budget, and you’re within 45 days of your expected closing date.

Float-down options exist — they let you lock but benefit if rates drop before closing. They cost 0.125-0.25% of the loan amount. Worth it in a volatile rate environment.

Frequently Asked Questions

Will mortgage rates go down in 2026?

Nobody knows with certainty. Most forecasters expect gradual moderation toward the low-to-mid 6% range by late 2026 if inflation continues cooling and the Fed delivers expected rate cuts. But rates in the 4-5% range that existed pre-2022 are unlikely to return anytime soon. Don’t wait for rates to drop dramatically — if you can afford the payment now, the right time to buy is when you find the right house.

Is it better to get a lower rate or lower closing costs?

Depends on how long you’ll keep the loan. A lower rate saves money every month forever. Lower closing costs save money upfront. If you’re staying 7+ years, prioritize the rate. If you might sell or refinance in 3-4 years, take the lower costs and accept the slightly higher rate.

Can I negotiate my mortgage rate?

Yes. Bring competing Loan Estimates to your preferred lender and ask them to match. Many will. Even a 0.125% reduction saves thousands over the life of the loan. Lenders have discretion on pricing — the rate they quote first is not necessarily their best rate.

What’s the difference between interest rate and APR?

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus lender fees, mortgage insurance, and discount points — it’s the true cost of the loan expressed as a yearly rate. Always compare APRs between lenders, not just interest rates. A lender offering 6.25% with $8,000 in fees might have a higher APR than a lender offering 6.375% with $2,000 in fees.