What are mortgage rates?

A mortgage rate is the interest rate a lender charges on a home loan. The rate affects the borrower’s monthly payment, total interest cost, and overall affordability. Higher mortgage rates increase the cost of borrowing, while lower rates can make home purchases and refinancing more affordable.

The most widely followed benchmark is the 30-year fixed mortgage rate , because many U.S. homebuyers use it when estimating monthly payments and comparing affordability.

Why mortgage rates change

Mortgage rates change as financial markets adjust to new information about inflation, economic growth, labor markets, Federal Reserve policy, and investor demand for bonds. When investors expect inflation or interest rates to remain high, long-term borrowing costs often rise.

Mortgage lenders also adjust pricing based on risk, loan demand, servicing costs, and market conditions. That is why mortgage rates may not always move at the exact same pace as Treasury yields.

How Treasury yields affect mortgage rates

Mortgage rates are closely related to the 10-year Treasury yield because both reflect long-term borrowing conditions. When the 10-year Treasury yield rises, mortgage rates often rise as well. When it falls, mortgage rates may ease.

The relationship is not perfect, though. Mortgage rates include additional pricing factors beyond Treasury yields, including lender margins, credit risk, servicing costs, and investor demand for mortgage-backed securities.

What is the mortgage spread?

The mortgage spread is the difference between the 30-year mortgage rate and the 10-year Treasury yield. It shows how far mortgage pricing sits above a key Treasury benchmark.

A wider spread can suggest tighter lending conditions, higher uncertainty, or weaker investor demand for mortgage-backed securities. A narrower spread suggests mortgage rates are moving closer to their Treasury benchmark relationship.

15-year vs 30-year mortgage rates

A 15-year mortgage rate is usually lower than a 30-year mortgage rate because the loan is repaid faster and lenders take on less long-term risk. The tradeoff is that monthly payments are higher because the repayment period is shorter.

A 30-year mortgage usually offers a lower monthly payment, while a 15-year mortgage can reduce total interest paid and help borrowers build equity faster.

How borrowers can use rate data

Borrowers can use rate data to compare loan options, evaluate refinance timing, estimate monthly payments, and understand how market conditions affect affordability. Looking at both current rates and historical trends helps put today’s borrowing costs into context.

Start with the mortgage rates today homepage for a broad view, then compare individual rate pages and calculators based on your goal.

Mortgage rates FAQ

Does the Federal Reserve set mortgage rates?

No. The Federal Reserve does not directly set mortgage rates, but its policy decisions influence broader interest rate conditions, bond yields, and lender expectations.

Why are mortgage rates higher than Treasury yields?

Mortgage rates include additional costs and risks beyond Treasury yields, including lender margins, servicing costs, credit risk, and mortgage-backed securities market conditions.

Which mortgage rate should I watch first?

Most borrowers start with the 30-year fixed mortgage rate because it is the most common benchmark for monthly payment estimates and housing affordability comparisons.