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Mortgage rates had been easing during the ceasefire in Iran — although that ceasefire, which was set to end mid-week, isn’t looking so solid today. But for now, we’re seeing APRs similar to where we ended last week, and lower than last Monday.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 6.03% APR, according to rates provided to BW by Zillow. This is one basis point lower than Friday and 13 basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
Keep reading below the chart for more on why conflict in the Middle East has been driving mortgage rates recently.
Average mortgage rates, last 30 days
📉 When will mortgage rates drop?
Mortgage rates track the bond market, specifically, the yield (basically, the interest rate) on 10-year Treasury notes. Here’s the super short version:
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Lenders sell mortgages on the secondary market where the loans are pooled and packaged into mortgage-backed securities (MBS), which are investments that pay a fixed rate of return.
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MBS attract similar investors to bonds like Treasuries, which also pay a fixed rate of return. Thanks to refinancing and home sales, 10 years is a safe overall lifespan estimate for mortgages, hence the benchmark to the 10Y T-note. Because mortgages are a little riskier, MBS will always have a slightly higher return than 10-year Treasuries.
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Mortgage rates are determined by lenders adding a set amount — the “spread” — to the yield, or return on, a 10Y T-note. The spread covers the lenders’ costs as well as the risk premium investors will demand.
I know, I know, the short version wasn’t that short. But I tried. The main thing to know is that mortgage rates follow the yield on the 10YT.
Inflation kinda ruins bonds’ safe harbor status because if money’s worth less, so are bonds’ returns — that set payout doesn’t go as far. Less demand for bonds means their prices fall, and as bonds’ prices drop, their yields rise relative to those price tags. That’s essentially why we saw mortgage rates rise so quickly in March.
Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).
With rates where they are right now, you could start considering a refi if your current rate is around 6.53% or higher.
🏡 Should I start shopping for a home?
There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.
Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget. BW’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.
🔒 Should I lock my rate?
If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period. Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.
🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.
🧐 Why is the rate I saw online different from the quote I got?
The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances. In addition to market factors outside of your control, your customized quote depends on your:
Even two people with similar credit scores might get different rates, depending on their overall financial profiles.
👀 If I apply now, can I get the rate I saw today?
Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.
About the author
Kate Wood is a lending expert and certified financial health counselor (CHFC) who joined BW in 2019. With an educational background in sociology, Kate feels strongly about issues like inequality in homeownership and higher education, and relishes any opportunity to demystify government programs. Prior to BW, she wrote about home remodeling, decor and maintenance for This Old House.