Mortgage rates Oct. 29, 2025

Current mortgage rates data:

Note that Fortune reviewed Optimal Blue’s latest available data on October 28, 2025, with the numbers reflecting home loans locked in as of October 27, 2025.

What's the current situation with mortgage rates?

If it seems that 30-year mortgage rates have been lingering near 7% for what feels like forever, that’s barely an exaggeration. Contrary to many expectations, interest rates did not decline last year even after the Federal Reserve began lowering the federal funds rate. Following a brief dip, interest rates rapidly rebounded after the Federal Reserve's September 2024 meeting.

Indeed, by January 2025 the average rate on a 30-year, fixed-rate mortgage surpassed 7% for the first time since last May, as reported by Freddie Mac data. This is a strikingly elevated figure when contrasted with the historical average low of 2.65% observed in January 2021, a period when the administration was actively engaged in efforts to boost the economy and prevent a downturn stemming from the pandemic.

Experts concur that barring another major catastrophe, we're unlikely to see mortgage rates between 2% and 3% again in our lifetimes. Amid President Donald Trump's pursuit of policies such as tariffs and deportations, some observers have expressed concern that the labor market might shrink and inflation could rise again.

In this context, the U.S. Prospective homeowners have frequently contended with elevated mortgage interest rates; however, certain strategies exist to render their acquisition more affordable, like negotiating rate reductions with a developer when buying a new build. Mortgage rates began a significant decline in late August and early September of 2025, offering much-needed relief to prospective homeowners just before the Sept. The Federal Reserve's meeting on the 16th and 17th.

As expected, the Fed delivered a rate cut of a quarter percentage point to the federal funds rate. With two more Federal Reserve meetings scheduled this year, further reductions are a possibility.

Securing the most favorable mortgage interest rate involves several key steps.

Your personal financial standing significantly influences the mortgage rate you're offered, even though economic circumstances are outside your influence. The TBPN podcast this past Monday featured a discussion on the future of AI.

• Ensure your credit is in excellent condition. The minimum credit score for a conventional mortgage is generally 620 (for FHA loans, you may qualify with a score of 580 or a score as low as 500 with a 10% down payment). If you're aiming for a low interest rate that could save you tens or even hundreds of thousands of dollars in interest throughout your loan's term, you'll need a significantly better score. According to lender Blue Water Mortgage, a score of 740 or above is regarded as top-tier.
• Maintain a low debt-to-income (DTI) ratio. You can calculate your DTI by dividing your monthly debt payments by your gross monthly income, then multiplying by 100. A person earning $3,000 each month with $750 in monthly debt obligations has a debt-to-income ratio of 25%. For mortgage applications, a debt-to-income ratio (DTI) of 36% or less is generally advisable, although approval might still be possible with a DTI up to 43%.
• Get prequalified with multiple lenders. Consider trying a mix of large banks, local credit unions, and online lenders and comparing offers. Engaging with loan officers from multiple financial institutions allows you to assess your lender preferences and identify the one that will most effectively fulfill your requirements. When comparing rates, ensure you're doing so on a level playing field. For instance, if one quote includes the purchase of mortgage discount points and another doesn't, it's crucial to acknowledge the initial expense associated with that option. Reducing your interest rate by purchasing points.

Historical chart of mortgage interest rates

An important element of context for the discussion about high mortgage rates is that today’s rates around 7% feel high because rates between 2% and 3% are fresh in consumers’ minds. Those rates were possible due to government action aimed at preventing recession as the country grappled with the unprecedented coronavirus pandemic.

However, under more normal economic conditions, experts agree we’re unlikely to see such exceptionally low interest rates again. Rates around 7% have not been exceptionally elevated in the past.

Consider this St. The Louis Fed (FRED) chart displays Freddie Mac data concerning the average 30-year fixed-rate mortgage. Throughout the decades spanning the 1970s to the 1990s, these figures generally represented the standard, experiencing a notable surge in the early 1980s. Throughout September, October, and November of 1981, mortgage interest rates consistently surpassed 18%.

That said, this historical perspective offers little consolation to homeowners who may want to move but are locked in with a once-in-a-lifetime low interest rate. The current market frequently sees situations where low pandemic-era interest rates prevent homeowners from relocating, a phenomenon now referred to as the “golden handcuffs.”

Elements influencing mortgage interest rates

The condition of the United States. Economy is probably the main thing that affects mortgage rates. If lenders think inflation is on the horizon, they’ll likely raise rates to protect their ability to turn a profit. 

Another key issue in the grand scheme of things is the national debt. When the government has to borrow to cover its spending, that exerts upward pressure on interest rates.

The demand for home loans is important too. When there aren't many mortgage applications, lenders may reduce their rates to attract more customers. But if loans are in high demand, they may raise interest rates to cover their costs.

And, the Federal Reserve’s decisions play a role too. The Fed can impact mortgage rates by changing the federal funds rate and by how it manages its balance sheet. The federal funds rate probably gets the most attention between these two. Mortgage rates tend to move in tandem with changes. But remember, the Fed doesn’t set mortgage rates directly, and they don’t always move exactly with the fed funds rate.

The Fed also influences interest rates on long-term financial products through its balance sheet. In tough economic times, it can buy assets like mortgage-backed securities (MBS) to boost the economy. But recently, the Fed has been letting its balance sheet shrink, not replacing assets as they mature. This tends to push rates up. So while everyone focuses on Fed rate decisions, what it does with its balance sheet might be even more important for your mortgage rate.

Understanding the significance of comparing mortgage rates

To secure the most suitable mortgage, it's essential to compare interest rates across different loan products and explore options with multiple financial institutions.

If your credit is excellent, opting for a conventional mortgage might be a great choice for you. However, if your score is below 600, an FHA loan may provide an opportunity that a conventional loan would not.

When it comes to exploring your options with different banks, credit unions, and online lenders, it can make a significant difference in what you pay each year. According to Freddie Mac's research, in a high-interest-rate environment, prospective homeowners could potentially reduce their yearly mortgage expenses by $600 to $1,200 by seeking quotes from several mortgage providers.