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Keeping up-to-date on mortgage rate trends can help you spot opportunities to lock in a better rate and provide a useful benchmark when comparing lenders. Because mortgage rates change daily — sometime even multiple times a day — it’s worth comparing and tracking mortgage rates regularly to stay on top of recent changes in the mortgage rate and where rates stand today.
Unless you’re able to pay all cash for a home, you’ll likely need a mortgage.
Mortgage interest is what you pay a lender on borrowed money for your home purchase. The mortgage interest rate gets applied to your loan principal — the amount you’re borrowing — and plays a major role in determining your monthly mortgage payment and the total amount you’ll pay over the full loan term.
Here are key terms to help you better understand how mortgage rates work while you’re home shopping and comparing mortgage options:
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Mortgage interest rate: The mortgage interest rate is the fundamental annual cost you pay your lender to borrow money to finance your home purchase.
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Annual Percentage Rate (APR): APR reflects your total annual cost for borrowing and includes the mortgage interest rate, plus lender fees and other loan charges.
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Principal: The loan amount you borrow from your lender that you must fully repay.
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Fixed-rate mortgage: A fixed-rate mortgage has a set interest for the entire loan term, resulting in predictable monthly payments.
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Adjustable-rate mortgage (ARM): Unlike fixed-rate mortgages, ARMs have rates that fluctuate over time based on market conditions, meaning your monthly payment will either rise or fall at regular intervals. Many ARMs start with a low introductory fixed interest rate before adjusting later.
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Total interest costs: Your interest rate affects both your monthly mortgage payment and the total amount in interest you’ll pay over the life of the loan.
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Amortization: Amortization is the process your lender applies to your monthly mortgage payments until your loan is fully paid off at the end of the term. How it works: Your monthly payments remain fixed for the entire loan, but initial payments go mostly toward interest, while later payments go more toward principal.
How your monthly payment and interest costs change based on mortgage rates
Even small changes in mortgage rates can have a meaningful impact on both your monthly payment and your total interest costs over the life of the loan.
We used CNN’s mortgage payment calculator to show how different mortgage rates affect costs* for the following scenario:
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Home value: $400,000
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Down payment: 20% ($80,000)
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Loan amount: $320,000
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Loan type: 30-year, fixed rate
|
5.5% rate |
6.0% rate |
6.25% rate |
|
|---|---|---|---|
| Monthly mortgage payment (principal + interest) |
$1,817 |
$1,919 |
$1,970 |
| Total loan costs over 30 years |
$654,093 |
$690,682 |
$709,306 |
| Total interest costs over 30 years |
$334,093 |
$370,682 |
$389,306 |
| Difference in total interest costs |
$0 |
+$36,589 |
+$55,213 |
*Figures are rounded to the nearest dollar
Sure, a difference of three-quarters of a percentage point may not sound dramatic at first, but in this example you’ll notice it translates to more than $55,000 in additional interest over the life of the loan between a 5.5% and 6.25% mortgage rate.
Keep in mind that in addition to your monthly payment of principal and interest, you’ll also be required to pay property taxes and homeowners’ insurance, along with possible added costs, such as extra homeowners insurance if you live in a high-risk area, mortgage insurance and homeowners association (HOA) fees.
Multiple factors impact affect mortgage rates. Some are within your control, such as your credit score and down payment, and some aren’t, such as inflation and broader economic conditions.
Here’s a rundown of some of the biggest factors that influence your mortgage rate.
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10-Year Treasury yields: Homeowners with 30-year mortgages often sell or refinance between seven and 10 years. Because of this, mortgage lenders often use the 10-Year Treasury bond as a key benchmark when pricing fixed mortgage rates.
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Federal Reserve policy: The Federal Reserve is the US central bank, charged with managing inflation and employment levels. One of the Fed’s main tools is adjusting the federal funds rate, its key benchmark interest rate. While the Fed doesn’t set mortgage rates, its rate decisions — or the lead-up to its decisions — often influence mortgage rates indirectly.
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Inflation: To curb rising inflation, the Fed often responds by raising the federal funds rate, which typically makes borrowing across the economy more expensive, including the cost of getting a mortgage.
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Broader economic conditions: Buyer demand and the availability of capital can also play a role. For example, lenders have only a given amount of funds to lend at any time, so if more buyers enter the market, increased demand for home loans can put upward pressure on mortgage rates.
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Negative global events: Geopolitical conflicts, international financial crises, natural disasters, trade wars and pandemics can disrupt financial markets. These shocks often ripple through the economy and can ultimately influence mortgage rates.
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Credit score: Lenders use this score to assess borrower risk. Scores range from 300 (Poor) to 850 (Exceptional). Typically, the higher your credit score, the more likely you are to qualify for lower mortgage rates.
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Down payment amount: This is the upfront money you contribute out of your own pocket toward your home purchase.
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Loan-to value (LTV) ratio: LTV measures your loan amount against a home’s appraised value, expressed as a percentage. For example, if you put $80,000 down on a $400,000 home, you would need to borrow $320,000, resulting in an 80% LTV ratio. The more you put down upfront, the lower your LTV ratio, which generally helps you qualify for a lower mortgage rate.
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Mortgage type, loan structure and term length: Your mortgage rate can vary based on loan type and structure, such as a conventional loan versus a government-backed loan or a fixed-rate versus adjustable-rate mortgage structure. The loan term also matters: For example, the popular 30-year mortgage typically has a higher interest rate than shorter-term loans, although it also comes with lower monthly payments.
Another factor that’s within your control? The lender you choose. That’s why comparing the rates and terms of several lenders will improve your chances of getting the best deal. Go with the first lender you find, and you could end up leaving money on the table.
There are multiple approaches you can take to improve your chances of getting the best mortgage rate.
For one, you should always compare several lenders. Freddie Mac research reveals that homebuyers who get two rate quotes could save $1,500 over the life of the loan. Bump that up to six rate quotes, and you could save $3,000 on average over your full loan term.
To secure the best mortgage rate, Keith Gumbinger, vice president of mortgage data company HSH, advises prospective homebuyers to take the time to get their personal profile into shape.
“[T]o get the best rates, you’ll want to make sure your credit score is as high as it can possibly be, that your debt load is low and that you’ve got a fair bit of assets on which to draw for down-payment closing costs,” Gumbinger said.
Gumbinger also said it’s wise to lock in your rate, especially if small rate fluctuations could jeopardize your deal. For those who want to gamble on a lower rate showing up, he says to ask your lender about a rate float-down option. For a small fee, you may be able to hop on a lower rate if one becomes available.
Predicting whether mortgage rates will rise or fall is tricky. Multiple economic factors influence mortgage rates, and unexpected events can sabotage even the most seasoned economist’s forecasts.
Still, monitoring expert insights, interest rate trends and broader economic indicators can offer clues about where mortgage rates may be headed.
Here’s where some housing and mortgage experts expect rates to head in the coming months:
Fannie Mae says mortgage rates will remain flat in 2026
In its May forecast, housing finance giant Fannie Mae expects the average 30-year fixed mortgage rate to average 6.3% through the end of 2026.
The latest forecast from the Mortgage Bankers Association, the national real estate industry finance trade group, projects the average 30-year fixed mortgage rate will remain around 6.3% through September, before gradually easing to an average of 6.2% by the end of 2026.
In its latest economic outlook, the national trade association representing home builders remarked that the Iran conflict pushed mortgage rates up from their recent 2026 lows. Still, despite what NAHB senior economist Fan-Yu Kuo described as a “bumpy path ahead,” the group expects the 30-year mortgage rate to dip just below 6% by the end of the year.
While it’s tempting to predict when mortgage rates will fall, trying to time the market is often a losing game.
Gumbinger advises that if you’re financially ready to buy and you find a home you truly love, waiting on the sidelines for rates to drop doesn’t make much sense.
“There’s no guarantee, (and presently less likelihood), that mortgage rates will decline significantly in the near term,” Gumbinger said, noting that persistent inflation and rising fuel costs are keeping rates high. “So this uncomfortable trend seems likely to continue for a while,” he said.
If you decide to move forward with a home purchase, avoiding a few major mistakes can go a long way to improve your chances of securing the best mortgage rate. For example, you should not make large purchases or deposit or withdraw significant sums of money, especially after submitting your application, Gumbinger said.
“Once your mortgage application is in process or you have a preapproval in hand, it’s a good idea to leave your finances alone, even if you really want to get a head start on furnishing a new place or you want to replace your car,” he said.
A good mortgage rate right now depends not only on housing demand and market trends, but also your financial profile. Despite the rates you see advertised, a good rate is highly personalized. Your credit history, debt level, income stability, loan type and down payment amount ultimately carry substantial weight in determining whether you qualify for the most attractive rates. Also, you’re more likely to secure a good mortgage rate if you compare offers from at least three lenders.
Whether mortgage rates fall below 6% again in 2026 will depend on a complex mix of economic conditions and geopolitical factors. Freddie Mac reported in late February that the average 30-year fixed mortgage rate briefly dipped to 5.98% — leaving housing market watchers hopeful that this was the beginning of a further decline. But soon after, conflict with Iran rattled markets — and mortgage rates reacted amid the uncertainty. If these tensions persist — or other unexpected economic shocks emerge — mortgage rates falling below 6% again in 2026 may become less likely.
Mortgage rates change frequently. Typically, rates change daily — sometimes even multiple times throughout the day. Because mortgage rates can move often and in response to economic news and market conditions, it’s smart to monitor trends if you’re planning to get a loan for a new home or refinance your existing mortgage.
Yes — and you should! In most cases, you can negotiate your mortgage rate throughout your mortgage process, up until you sign your closing documents. That said, your negotiating power will depend on the strength of your financial and credit profile, so ensuring you have a solid credit score, stable income and a low debt burden will help provide leverage when you’re negotiating a lender’s rates and fees. Additionally, shopping and comparing several mortgage lenders can help you negotiate better offers.
How we evaluate mortgage lenders and rates
According to CNN Underscored’s mortgages and loans methodology, we evaluate mortgage lenders based on an internal 100-point scoring system. Then, according to their scores in each category, we rank lenders as follows in weighted tiers:
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Exceptional: 95 and above
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Highly recommended: 86 to 94
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Recommended: 80 to 85
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Limited appeal: 75 to 79
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Proceed with caution: 74 and below
A low interest rate is important, but the lowest advertised rates are typically reserved for borrowers with the strongest financial profiles. That’s why we dig into not only how competitive lenders rates appear on the surface, but also how accessible their loan products are for a broad range of borrowers.
We consider the accessibility of lenders’ customer support channels, the quality of the digital experience they offer and how quickly a borrower can expect to typically close on a loan. We also evaluate whether lenders provide reasonably attainable rate or fee discounts that can help reduce borrower costs.
For this article, we consulted the following expert to gain his professional insights:
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Keith Gumbinger, vice president at HSH and mortgage expert for over 35 years
CNN Underscored’s mortgage rate and lending coverage is grounded in analysis of mortgage rate trends, lender offerings and borrower priorities.
This coverage is researched, written and reviewed by seasoned housing market and home lending writer Robin Rothstein, who closely tracks mortgage rate movements, housing market developments and changes affecting homebuyers and borrowers. Our goal is to help readers navigate an often complex borrowing landscape with clear, independent and practical guidance.
