RatesMarket noteThursday 8 October 2026, 23:24
Mortgage rates hit 7.40%, the highest since 2023
Mortgage rates rose for a seventh week: the 30-year fixed averaged 7.40%, the highest since November 2023, as Treasury yields climbed. Here is what it costs.
By The Notebook Desk
US mortgage rates rose for the seventh week in a row and are now at their highest in almost three years. The average 30-year fixed mortgage rate was 7.40% this week, up from 7.28% a week earlier, Freddie Mac said on Thursday. A year ago it was 6.30%. The 15-year fixed rate rose to 6.73%, from 6.60% last week and 5.53% a year ago.
The 30-year rate has not been this high since 16 November 2023, when it was 7.44%, according to Freddie Mac’s weekly series. It has risen every week since 20 August, when it stood at 6.65%. In late February it was as low as 5.98%.
Freddie Mac’s survey covers conventional loans to buy a home, for borrowers with excellent credit who put down 20%.
Why mortgage rates are rising
Mortgage rates follow the yield on the 10-year Treasury note, because most home loans are paid off or refinanced well before their 30 years are up. Lenders price them off what investors demand for lending to the US government over a similar period.
That yield has risen fast. It was 5.22% on 8 October, Treasury data show, up from 4.69% on 20 August and 4.02% in late February. On 5 October it closed at 5.31%. We wrote on 4 October that real yields, after inflation, did most of that work.
Mortgage rates have risen even faster than the Treasury yield. Since 20 August the 30-year mortgage rate is up 75bp, and the 10-year yield 53bp. The gap between the two has widened to 2.18 percentage points, from 1.96, by our calculation. A year ago it was 2.16.
The Federal Reserve is part of the story too. It raised its target range for short-term rates by a quarter point to 3.75% to 4% on 16 September. The minutes of that meeting, as we reported on 8 October, show most officials expect another rise by the end of the year.
What 7.40% means for monthly payments
Take the median price of a house sold in the US in the second quarter, $410,700, from the Census Bureau. With 20% down, the loan is $328,560. At 7.40% over 30 years, the monthly payment of principal and interest is about $2,275, by our calculation.
At last year’s rate of 6.30%, the same loan would cost about $2,034 a month. That is $241 a month more now, or almost $2,900 a year. Against the February low of 5.98%, the difference is about $309 a month. Taxes and insurance come on top.
High rates can also lock owners in. Anyone who borrowed at a lower rate has a reason not to sell and take a new loan at 7.40%.
How high is high
A 30-year rate of 7.40% is high for the last 20 years, but not the highest of this cycle. On 26 October 2023 Freddie Mac’s average reached 7.79%, its highest since November 2000. It then fell, with ups and downs, to 5.98% in February 2026, before rising again. The 15-year rate tells the same story: at 6.73%, it is the highest since 16 November 2023, and 1.2 percentage points above its level a year ago.
What could move mortgage rates next
The next Freddie Mac survey comes out on Thursday 15 October. The bigger test is the Fed’s next meeting, on 27–28 October. Markets gave an 18% chance of a rise there, on data to 7 October, according to Central Bank Watch.
For mortgage rates, Treasury yields matter most. If the 10-year yield keeps climbing, mortgage rates will follow. If it falls back from 5.22%, there is room for mortgage rates to ease, since they have risen further than the yield since August. For now, buyers face the highest borrowing costs since late 2023.
Disclosure
This is analysis and opinion, not investment advice.