Historical mortgage rates in the US: Highest highs and lowest lows

Updated: June 5, 2025 

If you’re a mortgage broker, knowing about historical mortgage rates can help you give better advice to your clients. Mortgage rates have changed a lot over the years. They were very high in the 1980s, dropped to record lows in 2020 and 2021, and have gone up again in recent years. 

By looking at how rates have moved in the past, you can help your clients understand what’s happening now—and what might happen next. In this article, Mortgage Professional America will explore historical mortgage rates over the last 50 years. We will explain why this history matters when you talk to homebuyers and people looking to refinance today. 

What is the historical interest rate for mortgages? 

Freddie Mac started keeping records of mortgage rates in the US in 1971. Since then, historical mortgage rates have either gone up or spiraled down. The fluctuations from historic highs and lows over the past decades have been dramatic. 

For instance, mortgage rates reached a historic high of 18.63 percent during the week of October 9, 1981. On the other hand, the average mortgage rate hit a historic low in January 2021 at just 2.96 percent.  

While the figures themselves are glaring, it’s important to put them into context in terms of the broader economy. The same is true regarding how much that meant to borrowers in dollars and cents. Plus, there are different factors that can impact an individual borrower’s mortgage rate.  

Historical mortgage rates from 1971 onwards 

Historical mortgage rates have averaged just under 8 percent since 1971, according to Freddie Mac. For instance, 30-year fixed-rate mortgages hovered between 7.29 to 7.73 percent in 1971, the first year Freddie Mac began surveying mortgage lenders. 

By 1974, the annual inflation rate had begun spiking and continued its rise well into the next decade. Banks and mortgage lenders were then forced to increase their rates to keep up with the climbing inflation. 

This led to unpredictable mortgage rates for borrowers. Nearing the end of 1978, mortgage rates reached double-digits at 10.11 percent. By the end of the 1970s, that rate rose even higher to more than 12 percent. 

Let's look at the historical mortgage rates in each of the past decades. We’ll explore how the historical mortgage rate fluctuations have impacted purchasing or refinancing homes in the country: 

1980s 

Inflation increased to 9.5 percent in 1981. The Federal Reserve increased the rate of federal funds to fight inflation. Due to the continuing increases in the federal funds rate, mortgage rates rose to a record high of 18.63 percent in 1981.  

Mortgage rates continued in the double digits for the remainder of the 1980s, despite the Fed’s strategy to return inflation back to normal levels near the end of 1982.  

Watch this clip to learn more: 

Why were mortgage rates so high in the 80s? 

Mortgage rates were very high in the 1980s mainly because of high inflation. During the late 1970s and early 1980s, inflation in the US rose sharply. To fight this, the Federal Reserve raised interest rates to slow down spending and control inflation. 

As a result, mortgage rates climbed higher than 18 percent in 1981. These skyrocketing historical mortgage rates made borrowing very expensive for homebuyers during that time. 

1990s 

At the beginning of the 1990s, mortgage rates returned to single digits more consistently. If your clients bought their property with a mortgage during the 1980s, they would’ve been able to cut their rates in half when the rates dipped.  

To illustrate, refinancing from an 18 percent rate to a 9 percent rate on a $120,000 mortgage could lower the monthly principal and interest payment from $1,809 to $966. This could save borrowers hundreds of dollars each month. This could’ve also allowed property owners to refinance numerous times. 

2000s 

When mortgage rates returned to levels above 8 percent in 2000, the downward rates trend stalled and changed direction. By 2003, mortgage rates eventually dipped below the 6 percent mark and hovered around the 5 percent and 6 percent range for the remainder of the decade. However, mortgage rates dropped to 4.81 percent in 2009.  

2010s 

In November 2012, mortgage rates hit a record low of 3.35 percent. For context, the monthly payment for a home loan of $100,000 at the record high mortgage rate of 18.45 percent in 1981 was $1,544. In 2012, when rates were 3.35 percent, the average monthly payment was considerably lower. For the rest of the decade, mortgage rates hovered around the 3.45 percent to 4.87 percent range.  

2020 to 2021 

In the early 2020s, mortgage rates dropped to historical new lows. To stabilize the economy in the face of the COVID-19 pandemic and its lockdowns, the Federal Reserve cut the federal funds rate to nearly 0 percent. Just over a year later, that helped contribute to one of the highest increases in inflation since the 1980s. 

The 30-year mortgage rate dropped to a new historical low of 2.68 percent by December of 2020. In 2021, mortgage rates hovered between 2.70 percent and 3.10 percent, which gave many borrowers the chance to refinance or purchase properties at the lowest rates on record.  

2022 

The Consumer Price Index rose by 8.5 percent in March 2022. That was the biggest 12-month increase since 1981. Beginning the year at 3.45 percent in January, mortgage rates were already increasing prior to the inflation report. 

Mortgage rates continued to increase steadily every month that year. For better understanding, watch this video about historical mortgage rates from the 1970s to 2022: 

2023 

After record lows in 2020 and 2021, mortgage rates continued to rise sharply in 2023. The year began with the 30-year fixed mortgage rate at over 6 percent in January. Mortgage rates climbed throughout the year, reaching more than 7 percent by October. 

Rising inflation and the Federal Reserve’s efforts to cool the economy kept rates elevated. By the end of 2023, rates hovered around the 7 percent to 7.5 percent range, putting pressure on homebuyers and reducing refinancing activity. 

2024 

Mortgage rates stayed relatively high in 2024, but they began to stabilize compared to the sharp increases of previous years. The year started with rates around 6.62 percent in January and fluctuated between 6 percent and 7 percent for much of the year. 

Historical mortgage rates reached a high of 7.22 percent during the summer months before gradually easing. By the end of the year, the 30-year fixed mortgage rate settled at around 6.85 percent. While still high by historical standards, this slight improvement gave some homebuyers a small window of opportunity. 

2025 

In 2025, mortgage rates remain elevated but show signs of slowly trending downward. As of May, the average 30-year fixed mortgage rate is 6.90 percent. Some experts thought that rates would drop to around 6 percent by the end of the year, but that now seems unlikely. 

Most experts now expect mortgage rates to stay in the high 6 percent range for the rest of the year. Rates have been above 6.5 percent for more than six months. Many homebuyers who waited for rates to drop last year saw little change. 

Overall, it’s difficult to predict big changes because the economy is still uncertain. 

Check out this line graph showing the average 30-year fixed historical mortgage rates by year from 1980 to 2025: 

What is the lowest mortgage rate ever? 

The lowest interest rate for a mortgage in history came in 2020 and 2021. In response to the COVID-19 pandemic and subsequent lockdowns, the 30-year fixed rate dropped under 3 percent for the first time since 1971, when Freddie Mac first began surveying mortgage lenders. In January 2021, the new record low interest rate was just 2.65 percent.  

To put that into perspective, the monthly cost for a $200,000 mortgage loan at a rate of 2.65 percent is $806, not counting insurance or taxes. Compared to the 8 percent long-term average, your clients would save $662 per month, or $7,900 per year. 

Here's a clip showing the lowest mortgage rates recorded in history: 

Lowest annual historical mortgage rate  

While the lowest interest rate for a mortgage in history came in 2020-2021, the lowest annual mortgage rate on record was in 2016, when the typical mortgage was priced at 3.65 percent. 

This means that for a mortgage of $200,000, and a rate of 3.65 percent, the average monthly cost for principal and interest was $915. Compared to the long-term average mortgage rate, that is $553 per month less.  

What is the highest 30-year mortgage rate ever? 

The highest 30-year mortgage rate on record came in 1981. That year, the average mortgage rate was at a whopping 16.64 percent. To put that into context, at 16.64 percent, the monthly cost for principal and interest on a $200,000 mortgage would be $2,800. 

But it got worse. Some homeowners actually paid more money. During the week of October 9, 1981, mortgage rates averaged 18.63 percent—the highest weekly rate recorded. In fact, that was almost five times higher than the annual mortgage rate in 2019. 

Factors affecting historical mortgage rates 

Mortgage rates have changed over the years due to several common factors. Understanding these will help aspiring and current mortgage brokers explain shifts to their clients and prepare for market changes. Each of these factors has a major part in how banks and mortgage lenders set interest rates. Below are the main influences: 

1. inflation and the Federal Reserve 
2. economic growth 
3. government policies and programs 
4. global events and investor behavior 
5. housing market trends 

Let's take a closer look at each: 

1. Inflation and the Federal Reserve 

Mortgage rates usually rise when inflation increases. Banks and mortgage lenders raise their rates to make sure that the money they get back keeps its value over time. The Federal Reserve responds to inflation by raising or lowering the federal funds rate. These changes affect borrowing costs across the US, especially home loans. 

2. Economic growth 

A growing economy means more people have jobs and spend money, increasing the demand for property loans. When demand is high, mortgage rates often go up. During slowdowns or recessions, the Fed may lower interest rates to support the economy. Lower Fed rates can lead to lower mortgage rates. 

3. Government policies and programs 

Government-backed programs like those from Fannie Mae and Freddie Mac affect how easily people can get mortgages. These programs can lower risk for mortgage providers. In turn, they might help keep the mortgage rates stable. 

In times of crisis, the government might offer support that directly affects mortgage rates. Examples include rate changes during the 2008 financial crisis and the COVID-19 pandemic. 

4. Global events and investor behavior 

Events like wars, financial crises, or foreign policy changes can affect US financial markets. Investors often respond by moving money into safe assets like US Treasury bonds. 

When demand for bonds rises, their yields drop. More often than not, mortgage rates follow. Global uncertainty usually leads to lower mortgage rates in the US. 

5. Housing market trends 

High demand for homes can lead to higher mortgage rates as banks and mortgage lenders adjust to increased activity. If fewer people are buying homes, home loan providers might lower their rates to encourage more borrowing. 

Aside from these five factors, trends in home construction, property values, and buyer behavior can also impact mortgage rates. 

Navigating historical mortgage rates 

As we have seen, there are many factors that can influence your clients’ mortgage rate over time. It can be a very tricky road to navigate Each change in inflation, economic activity, and government policy can cause mortgage rates to rise or fall. The same is true for global events or housing demand. Understanding these shifts helps mortgage brokers explain past rate movements and provide better guidance to their clients. 

Since 1971, mortgage rates in the US have reached highs of over 16 percent and lows of under 3 percent. These changes have directly affected borrowers’ monthly payments and overall affordability. By understanding average mortgage rate patterns, mortgage brokers can help clients choose the right loan products and lock in favorable rates. Finally, you can help your clients set realistic expectations in an everchanging market. 

For more on the current mortgage rates and latest trends, check out our Market Updates page.