Mortgage Interest Rates Today: Rates Fall to 6.18%, Reflecting an Up-and-Down Bond Market

Mortgage rates edged lower on Wednesday compared to the previous week, following bond market swings triggered by mixed economic indicators: a weak November jobs report and a soft but potentially overly optimistic inflation reading.

The average rate on 30-year fixed home loans decreased to 6.18% for the week ending Dec. 24, down from 6.21% the week before, according to Freddie Mac. Rates averaged 6.85% during the same period in 2024.

“The average 30-year fixed-rate mortgage decreased further this week,” said Sam Khater, Freddie Mac’s chief economist. “Declining rates offer a timely and welcome gift for aspiring homebuyers.”

The holiday week saw borrowing costs tick up within a narrow range after the 10-year Treasury yields first declined and then rebounded. This volatility reflected a flurry of economic data releases, including delayed labor figures that showed the unemployment rate rising to 4.6%, the highest since September 2021, as well as cooling inflation and a stronger-than-expected third-quarter GDP print released on Tuesday, indicating that the U.S. economy grew at the fastest pace in three years. 

Overall, with Federal Reserve policy expectations largely priced in and limited holiday trading, mortgage rates have remained broadly stable as 2025 winds down.

"While this week’s move is small, ending the year with mortgage rates near their lowest level of 2025 is a welcome development for homebuyers heading into 2026. Most of the rate declines this year came in late summer and early fall, when seasonal demand was already cooling, meaning most prospective buyers haven’t fully felt the benefit yet," says Realtor.com® senior economist Jake Krimmel.

“Right now, inventory remains higher than last year in most markets, and buyers are heading into 2026 with a meaningfully better rate environment than they faced during the 2025 spring season, when mortgage rates were over 6.80%. If mortgage rates can simply hold in this range—or move modestly lower—buyers are likely to see a noticeable increase in purchasing power next year, even amid lingering macro and Fed policy uncertainty. It won’t take much improvement from here for 2026 to feel like a step forward after two slow housing years."

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to go up. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you're able to pay back the loan.