WASHINGTON, DC — Mortgage rates were mostly higher on Sunday, Oct. 4, 2026, according to Zillow lender marketplace data, with the 30-year fixed climbing to 7.40% and the 5/1 adjustable-rate mortgage rising sharply to 7.40%. The 15-year fixed moved the other way, slipping to 6.66%.
The changes were modest for some products and much larger for others, but the overall picture was still one of firmer borrowing costs for homebuyers and homeowners considering a refinance. Zillow’s figures are national averages, rounded to the nearest hundredth.
Purchase borrowers see the 30-year fixed hold near the top of the market
The most common loan choice remains the 30-year fixed, which gives buyers a lower monthly payment by stretching repayment over 360 months. Zillow put that rate at 7.40%, up 10 basis points from the prior week.
Other purchase rates in the same snapshot were 7.34% for the 20-year fixed, 6.66% for the 15-year fixed, 7.16% for the 7/1 ARM, 6.81% for the 30-year VA, 6.32% for the 15-year VA, and 6.25% for the 5/1 VA. The data show how widely pricing can vary by loan type and term.
Although adjustable-rate loans can begin below fixed-rate options, that pattern was not universal in this update. In some cases, fixed loans were already pricing more attractively than short-reset ARMs.
Refinance rates stay close to purchase pricing but not always below it
Zillow’s refinance snapshot was similar to the purchase market, but not always cheaper. The 30-year refinance rate was 7.31%, slightly below the purchase equivalent, while the 20-year refinance rate stood at 7.43% and the 15-year refinance rate at 6.69%.
Other refinance averages included 7.33% for the 5/1 ARM, 7.09% for the 7/1 ARM, 6.95% for the 30-year VA, 6.68% for the 15-year VA, and 6.19% for the 5/1 VA. Zillow noted that refinance rates are often higher than purchase rates, though not always.
For borrowers, that means a refinance decision still depends on the full cost of the new loan, not just whether the headline rate looks lower on first glance.
What the 30-year and 15-year numbers mean for monthly budgets
The 30-year loan remains the most popular option because it spreads payments over a longer period and keeps the monthly bill lower. The trade-off is that borrowers pay interest for more years.
Zillow’s explainer used a $300,000 mortgage to show the difference. At a 6.41% rate on a 30-year term, the principal-and-interest payment would be about $1,878.48 a month, with $376,254 in interest paid over the life of the loan.
With the same loan amount on a 15-year term at 5.80%, the monthly payment would rise to $2,499.27, but total interest would fall to $149,869. That gap illustrates why short-term loans can save money overall even when they raise the monthly budget.
Fixed-rate and adjustable-rate loans solve different problems
A fixed-rate mortgage locks in the interest rate for the life of the loan unless the borrower refinances later. That predictability can help households plan around housing costs for years at a time.
An adjustable-rate mortgage keeps the rate fixed for an initial period and then resets after that. Zillow pointed to a 7/1 ARM as an example: the rate is fixed for seven years, then can change each year for the remaining 23 years of a 30-year term.
Adjustable loans often start lower than fixed loans, but the reset risk matters. If rates are higher when the adjustment period begins, the payment can move up, subject to the loan’s contract limits.
How borrowers can improve their odds before applying
Zillow’s guidance focused less on waiting for market-wide rate drops and more on strengthening a borrower’s own financial profile. The company said lenders tend to offer their best rates to people with larger down payments, stronger credit scores, and lower debt-to-income ratios.
That means paying down debt, saving more cash, and improving credit before shopping can matter just as much as the direction of rates on any single day. For buyers who are ready now, that may be a more practical path than hoping for a better market later.
The company also said shoppers should compare offers from three or four lenders and get preapproval within a short time frame to make comparisons more accurate and limit the impact on credit scores.
APR and lender comparisons can matter as much as the headline rate
Zillow also urged borrowers to look beyond the quoted interest rate and check the annual percentage rate, or APR. APR includes the interest rate plus discount points and fees, giving a fuller picture of the annual cost of borrowing.
That detail can change how a loan compares with another offer that appears cheaper at first glance. Two lenders may advertise similar rates, but the one with higher fees can cost more over time.
For households weighing a home purchase or refinance, the Sunday snapshot shows a market where the difference between loans is still meaningful. The best fit depends on the term, the loan type, and the borrower’s own finances as much as on the day’s national averages.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
