WASHINGTON, DC — Mortgage rates moved higher again on Sept. 17, with Bankrate putting the national average for a 30-year fixed mortgage at 7.06 percent. The average 15-year fixed rate was 6.39 percent.
The latest move pushes borrowing costs back above 7 percent after rates had already stayed elevated through much of 2026. Bankrate said the change came after the Federal Reserve raised the federal-funds rate on Sept. 16 for the first time in three years, citing persistent inflation.
While the Fed does not directly set mortgage rates, its decisions can still shape the direction of lending costs. Bankrate said the recent rate increase could keep pressure on mortgage pricing in the weeks ahead.
Why the Federal Reserve’s September move matters for home loans
The central bank’s rate move did not automatically change mortgage pricing, but it can influence how lenders and investors think about risk and where borrowing costs go next. Mortgage rates are tied closely to broader market conditions rather than to the federal-funds rate alone.
Bankrate said inflation remains the key reason the Fed kept policy tight for much of 2026. That same inflation backdrop has helped keep home-loan rates stubbornly high, even after a brief decline earlier in the year.
For buyers and homeowners, the practical effect is simple: the market is still offering loans at rates well above the lows seen in 2021 and above the brief sub-6 percent stretch that appeared in early 2026.
A shorter loan still costs less interest, but the monthly payment climbs
Bankrate’s figures show how much the term length changes the cost of borrowing. On a $350,000 loan, a 30-year mortgage at 7.06 percent would carry a monthly principal-and-interest payment of $2,342.68.
The same loan over 15 years at 6.39 percent would raise the monthly payment to $3,027.75, but total interest would fall sharply to $194,995.14. A 10-year loan at 6.27 percent would push the payment even higher, to $3,933.34, while lowering total interest to $122,001.14.
Bankrate said that a 20-year loan at 6.97 percent would sit between those options, with a $2,707.25 monthly payment and $299,739.33 in total interest. The tradeoff is clear: shorter terms can save a large amount of interest, but they demand more cash flow each month.
Shopping around can save real money over the life of the loan
Bankrate says comparing offers matters even more when rates are high. The company cites a study showing that homeowners who do not shop around typically pay an extra $78,000 over the life of a mortgage compared with borrowers who request multiple quotes.
That difference comes from more than the headline rate. Lenders can vary on fees, discount points, and the way they price risk based on your credit profile, down payment, and loan structure.
Bankrate recommends applying with at least three mortgage lenders to compare the full cost of a loan. For borrowers trying to stretch a budget, even small differences in price or terms can add up over decades.
Credit scores, down payments and points all affect the quote you get
Mortgage rates are not one-size-fits-all. Bankrate says lenders look at a borrower’s credit history and score when deciding how likely that person is to repay the loan, and that can push a quote higher or lower than the national average.
Down payment size also matters. Conventional loans may allow as little as 3 percent down if a lender approves it, but Bankrate says borrowers are more likely to qualify for a better rate with at least 20 percent down.
Buyers can also pay discount points upfront to lower the interest rate. Each point equals 1 percent of the loan amount and can reduce the rate by as much as 0.25 basis points, according to Bankrate.
Mortgage rates have swung sharply since 2021 and early 2026
The current move is part of a longer pattern of volatility. Bankrate said mortgage rates fell in mid-2025, then dropped below 6 percent in late February 2026, marking the lowest point in more than three years.
That relief did not last. Rates later climbed back above 7 percent in September, returning close to the levels seen in early 2025. Bankrate also noted that in early 2022 the average 30-year fixed mortgage was 4.72 percent, while the 15-year average was 3.91 percent.
For a longer view, the recent highs are still far below the extreme rates of the early 1980s, when average 30-year mortgages topped 16 percent. They are also well above the record-low 30-year rate of just under 3 percent seen in 2021.
What lenders and borrowers are watching next
Bankrate said mortgage pricing will keep responding to Treasury yields, mortgage-backed securities, investor sentiment and broader economic expectations. Those market forces can move rates even when the Fed is not changing policy.
Fannie Mae had previously expected rates to fall to 5.70 percent in 2026, but it now expects them to keep rising through the rest of the year. That outlook reflects the same inflation pressure that has shaped the Fed’s decisions.
For borrowers, the immediate question is whether to lock in now or wait for a better window. Bankrate suggests weighing the monthly payment against long-term interest costs, and making sure the budget also covers taxes, insurance, utilities, maintenance and possible homeowners association dues.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
