Mortgage ToolkitWhy mortgage rates change
Mortgage rates move with the broader bond market, particularly the 10-year Treasury yield, since fixed-rate mortgages are priced against long-term borrowing costs rather than the Federal Reserve's short-term rate directly. When investors expect strong growth or higher inflation, they demand higher yields on long-term bonds, and mortgage rates rise to stay competitive with those yields. When growth expectations soften or inflation cools, yields — and mortgage rates — tend to ease.
Four forces do most of the work here: Treasury yields set the floor mortgage rates are priced against; inflation erodes the real return lenders earn on a fixed-rate loan, so higher inflation expectations push rates up; Federal Reserve policy shapes short-term borrowing costs and market sentiment, which filters into mortgage pricing with a lag of weeks to months rather than instantly; and employment and economic data — strong jobs reports typically push yields (and mortgage rates) higher, while weak data does the opposite.
Fixed vs. adjustable rate
A fixed-rate mortgage locks your interest rate for the full loan term — your principal & interest payment never changes. An adjustable-rate mortgage (ARM) starts with a lower introductory rate that later adjusts based on a market index, which can raise or lower your payment after the initial fixed period ends. Most US, UK, and Canadian buyers choosing long-term stability opt for a fixed rate; this page tracks fixed 30-year and 15-year averages specifically. If you're deciding between the two terms, see our 30-year rate page and 15-year rate page for a direct side-by-side of the current averages.
What determines the rate a lender actually offers you
The average shown above is a national survey figure — the rate a specific lender quotes you depends on several factors layered on top of that baseline. Your credit score is one of the largest levers: a 60-point difference can shift your rate enough to cost tens of thousands of dollars in interest over the life of a loan. Your down payment matters too — a larger down payment lowers your loan-to-value ratio, which can unlock a better rate tier and, in the US, remove the need for PMI once you cross 20% equity. Loan type (conventional, FHA, VA, jumbo) and loan term also shift pricing, since shorter terms and government-backed loans are priced differently than a standard 30-year conventional mortgage.
How rate changes affect your payment
On a $400,000 loan, moving from 6.0% to 7.0% adds roughly $270/month and over $95,000 in interest across a 30-year term. Small rate differences compound significantly over a full mortgage — use the mortgage calculator above to see the exact effect on your own loan amount, or the amortization calculator to see how the interest-vs-principal split shifts year by year at your rate.
If you're already holding a mortgage and rates have moved since you closed, it's worth checking when refinancing actually makes sense — the break-even math depends on your closing costs and how long you plan to stay in the loan, not just the rate difference alone. And if you're weighing whether to buy at all right now, the rent vs buy calculator factors today's rate directly into that comparison.