Current mortgage rates report for Jan. 21, 2026: Rates are still holding steady

Current mortgage rates data:

Note that Fortune reviewed Optimal Blue’s latest available data on Jan. 19, with the numbers reflecting home loans locked in as of Jan. 16. 

What’s happening with mortgage rates in the market?

If it seems that 30-year mortgage rates have been lingering near 7% for what feels like forever, that’s barely an exaggeration. Many thought that rates would decrease when the Federal Reserve initiated cuts to the federal funds rate in late 2024, but that didn’t happen. There was a momentary decline before the September 2024 Fed meeting, but rates quickly jumped back up afterward.

Indeed, by January 2025 the average rate on a 30-year, fixed-rate mortgage surpassed 7% for the first time since last May, as reported by Freddie Mac data. That’s jarringly high compared to the historic average low of 2.65% recorded in January 2021, when the government was still working to stimulate the economy and avert a pandemic-induced economic slump.

Short of another widespread disaster, experts agree we won’t encounter mortgage rates in the 2% to 3% range during our lifetimes. And, with President Donald Trump pursuing policies like tariffs and deportations, some observers have worried the labor market could contract and inflation could resurge.

Against this backdrop, U.S. homebuyers have long grappled with high mortgage rates—though some can could find ways to make their purchase more economical such as negotiating rate buydowns with a builder when acquiring newly constructed property. Homebuyers finally got more substantial relief starting in late August 2025. Rates trended noticeably downward ahead of the Fed’s September meeting and inched downward leading into the October meeting.

As expected, the Fed delivered a rate cut of a quarter percentage point to the federal funds rate in September, and followed up with another quarter percentage point cut in October plus a third 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. For instance, lender Blue Water Mortgage notes that a score of 740 or higher is considered top tier.
• 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 comparing 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 on common ground—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

An important element of context for the discussion about high mortgage rates is that rates around 7% feel high because rates between 2% and 3% are fresh in consumers’ minds. Those rates were possible due to government action aimed at preventing recession as the country grappled with the unprecedented coronavirus pandemic.

However, under more normal economic conditions, experts agree we’re unlikely to see such exceptionally low interest rates again. Historically, rates in the vicinity of 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%.

That said, 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 state of the U.S. economy is probably the main thing that affects mortgage rates. If lenders think inflation is on the horizon, they’ll likely raise rates to protect their ability to turn a profit. 

Another key issue in the grand scheme of things is the national debt. When the government has to borrow to cover its spending, that exerts upward pressure on interest rates.

The demand for home loans is important too. If mortgage applications are scarce, lenders might lower rates to drum up business. But if loans are in high demand, they may raise interest rates to cover their costs.

And, the Federal Reserve’s decisions play a role too. The Fed can impact mortgage rates by changing the federal funds rate and by how it manages its balance sheet. The federal funds rate probably gets the most attention between these two. When it changes, mortgage rates often follow. But remember, the Fed doesn’t set mortgage rates directly, and they don’t always move exactly with the fed funds rate.

The Fed also influences interest rates on long-term financial products through its balance sheet. In tough economic times, it can buy assets like mortgage-backed securities (MBS) to boost the economy. But until fairly recently, the Fed was letting its balance sheet shrink, not replacing assets as they mature. This tends to push rates up. The Fed concluded this policy, known as quantitative tightening, 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 crucial steps in obtaining the best mortgage for your situation.

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

When it comes to exploring your options with different banks, credit unions, and online lenders, it can make a significant difference in what you pay each year. 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.