Current mortgage rates report for Dec. 16, 2025: Rates tick back up

Current mortgage rates data:

Note that Coins2Day reviewed Optimal Blue’s latest available data on Dec. 15, with the numbers reflecting home loans locked in as of Dec. 12. 

What’s happening with mortgage rates in the market?

If it seems like 30-year mortgage rates have been hovering around 7% for an eternity, that’s not far off the mark. Many watching the market anticipated rates would ease when the Federal Reserve began reducing the federal funds rate last year, but that didn’t occur. There was a short-lived decline leading up to the September 2024 Fed meeting, but rates quickly rebounded afterward.

In fact, by January 2025 the average rate for a 30-year, fixed-rate mortgage exceeded 7% for the first time since last May, according to Freddie Mac statistics. That’s a significant increase from the record-low average of 2.65% observed in January 2021, when the government was still attempting to boost the economy and prevent a pandemic-induced downturn.

Barring another major crisis, experts say we won’t have mortgage rates in the 2% to 3% range again in our lifetimes. And, with a cloudy economic outlook as President Donald Trump pursues policies including tariffs and deportations, some analysts have worried the labor market could constrict and inflation could resurface. In this climate, U.S. Homebuyers have long faced faced with high mortgage rates—though some found methods to make their purchase more manageable, such as negotiating rate buydowns with a builder when buying newly constructed homes.

Those looking to buy a home or refinance a mortgage did get some cause for joy in late August and early September of 2025. Ahead of the Fed’s Sept. 16-17 meeting, mortgage rates started trending noticeably downward, hitting a low not seen in almost a year. As expected, the Fed delivered a quarter percentage point reduction in the federal funds rate at that meeting. The central bank followed up with another quarter percentage point cut to its benchmark rate at the end of October and another when it met in December.

How to get the best mortgage rate you can

While economic conditions are beyond your control, your financial profile as an applicant also has a substantial impact on the mortgage rate you’re offered. With that in mind, aim to do the following:

• 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). However, if you’re hoping to get a low rate that could potentially save you five or even six figures in interest over the life of your loan, you’ll want a score considerably higher. Consider that according to lender Blue Water Mortgage, a top-tier score is one of 740 or higher.
• 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. For example, someone with a $3,000 monthly income and $750 in monthly debt payments has a 25% DTI. When applying for a mortgage, it’s typically best to have a DTI of 36% or below, though you may be approved with a DTI as high as 43%.
• Get prequalified with multiple lenders. Consider trying a mix of large banks, local credit unions, and online lenders and compare offers. Additionally, connecting with loan officers at several different institutions can help you evaluate what you’re looking for in a lender and which one will best meet your needs. Just ensure that when you’re comparing rates, you’re doing so in a consistent way—if one estimate involves purchasing mortgage discount points and another doesn’t, it’s important to recognize there’s an upfront cost for buying down your rate with points.

Mortgage interest rates historical chart

Some context for the discussion about high mortgage rates is that rates in the vicinity of 7% feel high because rates in the range of 2% to 3% are still a fairly recent memory. Those rates were possible due to unprecedented government action aimed at preventing recession as the country grappled with a global pandemic.

However, under more typical economic conditions, experts agree we’re unlikely to see such exceptionally low interest rates again. Historically, rates around 7% are not unusually high.

Consider this St. Louis Fed (FRED) chart tracking Freddie Mac data on the 30-year, fixed-rate mortgage average. From the 1970s through the 1990s, such rates were more or less the norm, with a significant spike in the early 1980s. In fact, September, October, and November of 1981 all saw mortgage interest rates exceeding 18%.

Of course, 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. Such situations are common enough in the current market that low pandemic-era rates keeping homeowners from moving when they otherwise would have become known as the “golden handcuffs.”

Factors that impact mortgage interest rates

The health of the U.S. Economy is probably the biggest driver of mortgage rates. When lenders worry about inflation, they can bump up rates to protect their profits down the road.

And on a related note, the national debt is another big factor. When the government spends more than it takes in and has to borrow, that can push interest rates higher.

Demand for home loans matters too. When demand is low, lenders might drop rates to attract business. But if lots of people are seeking mortgages, lenders might raise rates to handle the extra processing work.

The Federal Reserve also plays a key role, and can influence mortgage rates by changing the federal funds rate and by buying or selling assets.

Much is made of changes to the federal funds rate. When it goes up or down, mortgage rates often follow suit. But it’s crucial to understand the Fed doesn’t set mortgage rates directly, and they don’t always move in perfect sync with the fed funds rate.

The Fed also influences mortgage rates by means of its balance sheet. During tough economic times, it can buy assets like mortgage-backed securities (MBS) to pump money into the economy.

But for a while, the Fed was shrinking its balance sheet, letting assets mature without replacing them—which tends to push mortgage rates up. This policy, known as quantitative tightening, came to an end as of December 2025.

Why it’s important to compare mortgage rates

Comparing rates on different types of loans and shopping around with various lenders are both essential steps in obtaining the best mortgage for your situation.

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

When it comes to exploring options with different banks, credit unions, and online lenders, it can make a significant difference in your overall costs. Freddie Mac research indicates that in a market with high interest rates, homebuyers may be able to save $600 to $1,200 annually if they apply with multiple mortgage lenders.