Mortgage interest rates forecast for 2026

Whether you’re looking to buy a home or refinance your loan, no one wants to overpay for their mortgage.¹ So if you’re in the market to do either, you’ll likely want to follow mortgage interest rate predictions for the coming year. While mortgage rates in 2026 can’t be 100% ascertained without a time machine at this point, experts can speculate.

Are mortgage interest rates going up or down in 2026?

Before we get into 2026 mortgage rate predictions, it may be useful to kind of set the conditions under which interest rates might go up or down in the coming year. If there are signs of labor market weakness, the Federal Reserve may make moves encouraging lower mortgage rates. But if inflation remains a concern, rates may hold steady or even rise.

You can sign up for rate updates to get a real-time idea of where the market is.

2026 mortgage interest rate predictions according to industry experts

According to data collected from a November 2025 report from the National Association of REALTORS^® (NAR), homeowners live in their home for an average of 11 years and may or may not refinance. When you don’t get mortgage often, it helps to look to sources that have their finger on the pulse.

It should be noted that when these forecasts are published, it’s standard to predict the 30-year fixed rate. Here’s a table of mortgage rate predictions for 2026.

Redfin

Our friends at Redfin make a series of housing market predictions each year, and among them is the mortgage rate that can be expected once the calendar turns. They predict interest rates coming in around 6.3% in 2026.

The reasoning for this includes labor market weakness necessitating a move from the Federal Reserve, but not a big one given elevated inflation and Redfin’s expectation of avoiding a recession.

National Association of REALTORS^®

NAR Chief Economist Lawrence Yun predicts mortgage rates averaging 6% throughout 2025. Yun sees federal funds rate moves, rulings on the legality of tariffs, national debt considerations, inflation, and the Federal Reserve’s treatment of mortgage-backed securities on its balance sheet all playing a role.

Fannie Mae

Fannie Mae has a prediction of 6% mortgage rates in 2026, ticking down to 5.9% in 2027.

National Association of Home Builders

In its latest forecast, the residential construction trade group predicts mortgage rates of 6.17% in 2026 and 6.01% in 2027.

Mortgage Bankers Association (MBA)

The Mortgage Bankers Association, a trade association for mortgage loan originators, expects average mortgage rates of 6.4% in 2026 and 2027. It anticipates rates picking up slightly to 6.5% in 2028.

Historical trends in mortgage rates

To gain context for today, it’s important to look at the recent past to understand trends. The following data is courtesy of Freddie Mac’s Primary Mortgage Market Survey^®.

The last 5 years in the mortgage market have been a bit wild when it comes to mortgage rates. During the pandemic, rates dropped to rock-bottom as the Federal Reserve did everything it could to support the economy. Then rates swung the other way out of inflation concerns.

Most recently, rates have come down off of these highs as moves are being made to try to shore up the labor market.

How would the 2026 mortgage rate forecasts impact buyers?

But what would these forecasts mean in a practical example? Let’s break down some math. We’ll use the Redfin forecast of a 6.3% 30-year mortgage rate not only because they’re our friends, but also because it’s the most conservative estimate.

Let’s say you have a $350,000 loan amount at 6.3% interest (6.744% APR).³ Your monthly payment would be $2,166.40 over 30 years. You would pay just over $429,900 in interest over the life of the loan.

There are a couple of caveats here. Your actual payment will be higher due to property taxes and insurance. Also, because it’s based on a predicted rate, it doesn’t contemplate closing costs or other finance charges.

Factors influencing 2026 forecasts for interest rates

Several factors impact forecasted interest rates:

• Federal funds rate: Although not directly correlated, mortgage rates tend to follow the same general direction as the federal funds rate set by the Federal Reserve (Fed). In December 2025 projections, officials’ median expectation is one 0.25% cut in 2026.
• Inflation: If inflation is running hot, the Fed will raise interest rates to make borrowing more expensive, discouraging spending in an effort to bring prices down. If spending needs a bump to keep people working, they may lower rates.
• Bond prices: Mortgage rates are impacted by activity in the bond market because mortgage bonds underlie home financing. The higher the demand for bonds, the lower the yield and the lower your rate.
• Global events: Events around the globe can drive money into or out of the U.S. bond market, which has often been considered a safe haven. An example of this would have been money flooding in and mortgage rates dropping in the aftermath of Brexit.
• Economic upswings and downturns: When the economy needs support, rates tend to go down to encourage spending. During upswings, rates rise to keep inflation in check.

Other factors impact your personal rate, including how you plan to occupy the property as well as an analysis of your personal financial situation like your credit score, down payment or equity, income, and assets.

How to better prepare for your home buying journey

While it’s not possible to know the future, there are some things you can do to make sure you get the best possible interest rate, whether the broader market rates are heading down or on the rise.

Make a larger down payment

The amount of your down payment directly impacts your interest rate, because the bigger your down payment, the less risk there is in the eyes of a lender.

Buy down your rate

You can also lower your interest rate by paying your mortgage points up front at closing to save on interest over the life of the loan. In buyer’s markets, motivated sellers may even contribute to a temporary or permanent buydown of your interest rate after negotiations.

Increase your credit score

Improving your credit score can help you gain access to better rates because lenders view it as a better risk.

Get quotes from multiple lenders

If you shop around for a mortgage, different lenders may offer unique loan options that could enable you to get a better interest rate.

Study other market conditions

In addition to interest rates, studying other housing market conditions like inventory and tracking how long homes stay on the market can help you make a competitive offer without overpaying.

Get preapproved for a mortgage

Getting a preapproval not only sets a budget for you, but it shows sellers you’re serious enough about this to have your information reviewed by a lender.

Talk to your lender about the right time to lock in rates

Your lender may be able to look at the specifics of your situation and give advice on when to lock your rate. At the same time, it’s hard to time the market, so the most important thing to focus on is whether you can afford the payment.

The bottom line: Staying on top of market trends can help you make smarter home buying decisions

No matter who makes it, a forecast is only a best guess as to where mortgage rates are going to be. But giving yourself access to as much information as possible can help you be better prepared for whatever the market might throw at you.

If you think you’re ready, work with our Home Loan Experts to help you understand and navigate market conditions. Start your application online.

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

² Rocket Mortgage is an affiliate of Redfin. You aren't required to use its lending services. Learn more at redfin.com/afba.

³ The example payment on a $350,000 30-year fixed-rate loan at a projected 6.3% is $2,166.40 for the cost of 2.625 points paid at closing ($9,187.50). Due to future interest rate projections, the annual percentage rate (APR) is 6.744%. The loan-to-value ratio (LTV) is assumed to be 80%. The projection is based on Redfin data. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Projection valid as of December 19, 2025. Some state and county maximum loan amount restrictions may apply.

This article is for informational purposes only and is not intended to provide, and should not be relied on for, medical, legal, financial, or tax advice. You should consult with a qualified professional for advice specific to your situation. Consumers should independently verify that any services, products, or programs referenced meet their needs and comply with applicable requirements.