Mortgage rates and affordability

If you're in the market to buy a home, you should understand how the mortgage rate affects your ability to afford a home and watch mortgage rates carefully.

A mortgage rate is the interest rate you pay on the money you borrow to buy your house. A lower mortgage rate makes homes more affordable because it costs you less to borrow money, which in turn increases your purchasing power (the financial ability to buy the home).

Lenders set a mortgage rate for each person based on several personal factors, such as your credit, which determines the risk of loaning you money and whether you qualify for a loan, in addition to current market rates.

Even a small difference in your interest rate can make a big difference in your payments over the life of your loan. That’s why it’s important to watch mortgages rates closely if you’re buying a home.

30-Yr FRM
15-Yr FRM

The Primary Mortgage Market Survey® is based on loan applications submitted to Freddie Mac by lenders across the country and shows the average 30-year fixed-rate and 15-year fixed-rate mortgage rates. The results are released weekly on Thursdays at 12 p.m. ET.


To put rates in perspective, this chart outlines a $200,000 loan financed at various rates — allowing you to quickly see how rates impact your wallet.

30-year fixed mortgage rateapproximate payment on a $300,000 mortgage
6.5%$ 1,896
7%$ 1,996
7.5%$ 2,098

Mortgage payments are principal and interest only, based on a $200,000 fully amortizing mortgage. All terms are assumed to be 30 years.

Consider discount points

You may want to consider talking with your lender about buying discount points, which allow you to pay up front some of the interest on your home loan. In exchange, you receive a lower interest rate on your mortgage.

Buying discount points can save you money over the life of the loan, and points are most beneficial when you plan to own the home you're purchasing for more than 10 years.

Whether buying points makes sense depends on your personal situation. See how buying discount points might lower your mortgage rate with our discount points calculator.