Fixed rate history: Mortgage rate history from 1971 to present

From the double-digit rates of the early 1980s to today’s mortgage interest rates, market conditions have influenced homeownership in meaningful ways. The interest rate you get doesn’t just impact your monthly payment. It can also mean the difference of hundreds of thousands of dollars over the life of your loan.

Rates fluctuate constantly and, over the years, have seen high peaks and low troughs. Looking at the fixed rate history of mortgages is a good way to get perspective on today’s rates. We’ll cover historical rates for 30-year mortgages from 1971 through today.

30-year fixed mortgage rates over time

The 30-year fixed-rate mortgage is the most common home loan in the United States. Freddie Mac began tracking weekly interest rates on the 30-year fixed-rate loan in April 1971.

The year 1981 saw the highest annual average interest rate, which peaked at 16.64%. The lowest rate was 2.96% in 2021. You’ll also see that while 2025 interest rates are higher than in recent years, they’re still lower than they were for almost all the 1970s, 1980s, and 1990s.

This table shows annual average based on the weekly Primary Mortgage Market Survey® (PMMS®) readings. These are weekly reports released by Freddie Mac that give the average interest rates for U.S. mortgage loans. These weekly readings serve as a benchmark, but keep in mind that not every borrower secures that exact rate.

Historical mortgage rates by decade

Now that you’ve seen the raw data, let’s dive into the details, trends, and the reasons behind the numbers. Remember, these numbers are averages, not the precise rate every borrower paid. You also have to consider context. For example, higher rates are normal in periods of high inflation.

1970s

• Lowest: 7.38% in 1972
• Highest: 11.20% in 1979

Rates crept higher throughout the 1970s. They briefly dipped into the middle to high 8% range before peaking in 1979.

This was during a period of high inflation that continued into the next decade. The Federal Reserve took a more active role in regulating the money supply by increasing the target for the federal funds rate to address an inflation crisis, the result of food supply shocks and multiple oil crises during the decade.

1980s

• Lowest: 10.19% in 1986
• Highest: 16.64% in 1981

The 1980s started with a bit of a hangover from the 1970s. In 1979, another oil supply crisis occurred as the Iranian Revolution led to strikes on oil fields, resulting in a decline in production of about 4.8 million barrels of oil per day. During this time, the price of a barrel of oil spiked significantly. In response, regulations were loosened to allow more drilling in the United States, but these moves took time.

Already fighting the rampant inflation of the 1970s, the added supply shocks in the 1980s didn’t help, and the Fed was continually pushing rates higher. This had the effect of moving rates up across lending options, including mortgage rates.

1990s

• Lowest: 6.94% in 1998
• Highest: 10.13% in 1990

The United States achieved a level of economic prosperity in the 1990s not seen in the previous two decades. The U.S. economy was successful enough during the 1990s that other governments studied it to see what they could learn from our example. A report from the Australian government attributes much of the economic growth of the period to the U.S. being at the center of the internet revolution and benefiting from associated gains in productivity.

2000s

• Lowest: 5.04% in 2009
• Highest: 8.05% in 2000

Mortgage rates steadily declined from 8.05% in 2000 to the upper 5% range in 2003. However, the housing industry's growth, fueled by these attractive rates, was short-lived. The economy crashed in 2008, bringing the real estate market with it and triggering the Great Recession.

The housing crash worsened as home values steeply declined. This left many homeowners owing more on their homes than their property was worth, sometimes described as being underwater on a mortgage. To provide some relief and stimulate the economy, the Fed cut interest rates to make borrowing money cheaper.

The short-term rates at which financial institutions borrow money were slashed to near zero. This made it extremely inexpensive for banks to borrow money, and mortgage rates fell by almost a full percentage point, averaging 5.04% in 2009.

2010s

• Lowest: 3.65% in 2016
• Highest: 4.69% in 2010

Riding the wave of low bank borrowing costs, mortgage rates entered the decade at around 4.69%. They continued to fall steadily, reaching around 3.66% by 2012. In 2013, rates rose to 3.98% on average, due in large part to the bond market, which contracted when the Federal Reserve announced plans to stop buying as many bonds.

When fewer home buyers are available, the yields on mortgage bonds must go up to attract purchasers. This also causes mortgage rates to rise. In 2014, rates increased to an average of 4.17%, then dropped to an average of 3.85% in 2015 as the market calmed.

Although they were a little higher to end the year, rates in 2016 averaged 3.65%. With global uncertainty, investors flocked to the safety of the U.S. bond market to guarantee the steadiness of their investments.

2020s

• Lowest: 2.96% in 2021
• Highest: 6.81% in 2023

Rates declined throughout 2019. By January 2020, the average rate for a 30-year fixed-rate mortgage was about 3.11%.

In response to the COVID-19 pandemic, the Fed dropped the federal funds rate to 0% – 0.25%, causing other short-term and long-term rates to fall. This move was made to encourage home loans and other borrowing. It also led to a significant increase in refinance and purchase mortgage applications.

By Jan. 7, 2021, Freddie Mac reported the average mortgage rate for a 30-year home loan was 2.65%, one of the lowest mortgage rates in history.

Mortgage rates hovered within the same range throughout 2021. Since March 2022, though, the Fed has been raising its rates to reduce the amount of money in the economy. The average mortgage interest rate for a 30-year fixed-rate mortgage remained above 6% throughout 2023, peaking at over 7% in mid-August.

At the Federal Reserve meeting in September 2024, officials cut interest rates for the first time in 4 years due to progress in curbing inflation. Officials cut twice more, in November and December.

In 2025 rates continued to fall relatively slowly, dropping by about 0.3% on average compared to 2024. That trend continues through early 2026 with the average rate sitting at 6.30%, according to Freddie Mac.

How historical mortgage rates affect home purchases

Lower mortgage interest rates encourage home buying. Low rates mean you’ll pay less money in interest over the life of the loan and have a lower monthly mortgage payment. However, it can also increase demand for homes and mortgages due to that lower cost. That may drive home prices upward, reducing the savings brought by lower rates.

Mortgage lenders determine how much you can borrow by comparing your income to your monthly mortgage payment and considering your overall debt-to-income ratio (DTI). With a lower monthly payment, you may be able to afford a more expensive house.

If you’ve found a home that you like, you can approximate what you’d pay for it with this mortgage payment calculator from Rocket Mortgage.

Historical mortgage interest rates and refinancing

Mortgage refinancing is the process of swapping your old loan for a new one that ideally has more favorable loan terms. Homeowners can take advantage of reduced interest rates to lower their monthly payments if rates are lower than when they initially purchased their home. These savings could be applied toward the loan balance, other debt payments, or deposited into a savings account.

A cash-out refinance is an option if you have enough equity in your home. With a cash-out refinance, you can borrow the home equity you’ve built through repayment of your home loan as well as home value appreciation. You can use that money to pay off current debts or make home renovations.

Interest rates drive refinance conversations because they affect whether you save on the payment and how much you can tap into your equity for home improvements or other projects. If you’re thinking about refinancing¹, use Rocket Mortgage’s refinance calculator to see what your new monthly mortgage payment could be.

Keep in mind that refinancing comes at a cost. You have to pay closing costs and other fees, so whether refinancing will save you money depends on the difference in interest rate between the new and old loan, the cost of refinancing, and how long you plan to keep your new mortgage.

The bottom line: Mortgage rates are cyclical

In looking at the historical mortgage rate data available from Freddie Mac, a trend becomes clear: Except for a spike in the 1980s, rates have declined every decade, until now. That said, even though rates have increased since 2021, they’re still relatively low in historic terms.

Ready to start your journey to homeownership? You can start an application with Rocket Mortgage today.

¹Refinancing may increase finance charges over the life of the loan.