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9 min read Jul 13, 2023

Historical Mortgage Rates: Trends Over the Years

Historical mortgage rates have varied significantly because of a range of factors. These include inflation, the Federal Reserve’s monetary policy, housing market conditions, and the overall state of the economy.

During the pandemic, the Federal Reserve made significant cuts to the interest rates. However, mortgage rates have only seen an upward trend since 2021. It is only recently that the rates have started falling slightly.

As per a NAR report, the rates are likely to keep falling till the end of this year. If you are planning to take a loan to buy a house, consult with a mortgage broker. You will get the latest and most accurate information.

Let’s take a look at the historical trends of the 30-year fixed-rate mortgage. It is the most popular mortgage option for first-time home buyers.

Historical Mortgage Rates: 1970s to the Present

Mortgage Rates Chart

DecadeInterest Rate (Beginning)Interest Rate (End)
2020s2.65%6.81% (July 2023)


  • Average 30-year fixed-rate mortgage (FRM) rate: Around 8%-9%

The 1970s witnessed high inflation rates, driven by factors such as the oil crisis and rising commodity prices. In response, central banks raised interest rates to combat inflation, leading to higher mortgage rates.


  • Average 30-year FRM rate: Peaked at nearly 18% in the early 1980s
  • Average 15-year FRM rate: Around 15%-16% during the same period

To control inflation, central banks implemented tight monetary policies, resulting in high-interest rates. Mortgage rates reached unprecedented levels, exceeding 18% in the early 1980s. There were economic fluctuations, including recessions and recoveries, which contributed to rate volatility.


  • Average 30-year FRM rate: Ranged from around 7% to 10% during the decade
  • Average 15-year FRM rate: Approximately 6%-8%

In the 1990s, inflation rates moderated compared to the previous decade. As a result, central banks were able to reduce interest rates gradually, leading to a decline in mortgage rates over the course of the decade.


  • Average 30-year FRM rate: Varying from about 5% to 8%
  • Average 15-year FRM rate: Generally between 4% and 6%

The early 2000s saw a period of economic expansion, coupled with low inflation. Central banks maintained relatively low-interest rates to support economic growth, resulting in favorable mortgage rates.

The latter half of the 2000s was marked by the global financial crisis. To stimulate the economy, central banks lowered interest rates significantly, contributing to historically low mortgage rates.


  • Average 30-year FRM rate: Ranged from around 3.3% to 4.5%
  • Average 15-year FRM rate: Approximately 2.5%-3.5%

In the aftermath of the financial crisis, central banks implemented accommodative monetary policies to support economic recovery. Mortgage rates remained low for most of the decade as central banks kept interest rates at historically low levels.

The 2010s were shaped by factors such as slow global economic growth, geopolitical events, and changes in investor sentiment, which influenced mortgage rates to some extent.


As the decade is ongoing, reasons for changes in mortgage rates cannot be predicted. However, so far, the COVID-19 pandemic has been a major reason for a sudden dip in interest rates.

Post-pandemic, there has been an economic recovery that has led to a steady increase in the rates. 2023 has seen a slight dip again which is likely to continue into the next year.

Historical mortgage rates can provide insights into the housing market trends. They show how homeowners take advantage of interest rate fluctuations to refinance mortgages in different ways. Here’s an overview:

Historical Mortgage Rates

  • 1970s: Mortgage rates were generally high, peaking in the late 1970s and early 1980s.
  • 1980s: Mortgage rates reached unprecedented levels, surpassing 18% for 30-year fixed-rate mortgages.
  • 1990s: Rates gradually declined from the high levels of the 1980s, with some fluctuations.
  • 2000s: Rates generally decreased, hitting historic lows in the mid-2000s before rising again in the late 2000s.
  • 2010s: Rates remained relatively low throughout the decade, with occasional fluctuations.
  • 2020s: Rates declined drastically during the pandemic and then saw a sharp rise post-pandemic.

Refinancing Trends

  • High Rates and Refinancing: Homeowners often refinance their mortgages when rates drop significantly. This was evident in the 1980s when homeowners rushed to refinance to lower rates.
  • Lower Rates and Increased Refinancing: During periods of low rates, refinancing activity tends to increase. Homeowners seek to take advantage of better terms and reduce monthly mortgage payments.
  • Cash-Out Refinancing: Homeowners sometimes choose to refinance to cash out their home equity. They take a larger loan than the existing mortgage. The difference can be used for various purposes, such as home improvements or debt consolidation.
  • Adjustable-Rate Mortgage (ARM) to Fixed-Rate Mortgage (FRM): When interest rates rise, homeowners may refinance ARMs into FRMs to secure a stable interest rate.
  • Shortening Loan Terms: Homeowners may refinance to shorten the loan term (e.g., from a 30-year to a 15-year mortgage). They can pay off their mortgage sooner and save on interest payments.

It’s important to note that mortgage rates and refinancing trends can vary based on different factors. These include economic conditions, housing market dynamics, and individual financial situations. To determine the best time to refinance, you can consult a mortgage professional.

Historical mortgage rates have played a significant role in influencing home purchases. Here’s how they have impacted the home-buying process over the years:


Mortgage rates directly impact the affordability of homes. When rates are low, borrowers can qualify for larger loan amounts with the same monthly payment. They can also secure lower monthly payments for the same loan amount.

This increased affordability can motivate prospective homebuyers to enter the market. They can afford to purchase a more expensive home or have more favorable loan terms.

Buyer Demand

Lower mortgage rates generally stimulate buyer demand as they make homeownership more accessible. When rates are low, potential homebuyers take advantage of favorable borrowing conditions and lock in a lower rate.

This increased demand can drive up competition in the housing market and lead to higher home prices.

Housing Market Activity

Historically low mortgage rates can contribute to a robust housing market. Lower rates tend to spur homebuying activity, resulting in increased home sales and new construction.

This activity can have positive effects on the overall economy. There can be job creation, increased consumer spending, and growth in related industries such as construction and real estate.

Refinancing Incentives

Homeowners with existing mortgages may also be influenced by historical mortgage rates when considering purchasing a new home. If they can secure a lower rate on their new mortgage, it may make the transition more financially advantageous.

The availability of refinancing options can provide homeowners with more flexibility. It can potentially reduce their monthly mortgage payments, allowing them to allocate funds toward a new home purchase.

Historical Mortgage Rates FAQs

What are the lowest mortgage rates to date?

The lowest mortgage rates in history were experienced in recent years. Here are a few notable instances of historically low mortgage rates:

  • 2020-2021: In response to the COVID-19 pandemic and its impact on the economy, mortgage rates reached all-time lows. In late 2020 and early 2021, 30-year fixed-rate mortgage (FRM) rates dropped below 3%, with some mortgage lenders offering rates in the low 2% range.
  • 2016: In the wake of the Brexit referendum and global economic uncertainty, mortgage rates briefly dipped to very low levels. Rates for 30-year FRMs were near 3.4%, and 15-year FRMs were around 2.7%.
  • 2012-2013: Following the global financial crisis, mortgage rates hit historic lows. In late 2012 and early 2013, 30-year FRM rates dropped to around 3.3%, with 15-year FRM rates falling below 3%.

What are the highest mortgage rates to date?

The highest mortgage rates in history were experienced during the late 1970s and early 1980s. This period was marked by significant inflation and monetary tightening in the United States. Here are some notable instances of historically high mortgage rates:

  • 1981: In 1981, mortgage rates skyrocketed to unprecedented levels. The average 30-year fixed-rate mortgage (FRM) reached a peak of around 18.63%, making it one of the highest mortgage rates ever recorded.
  • The late 1970s to early 1980s: During this period, mortgage rates remained consistently high. For several years, the average 30-year FRM fluctuated between 16% and 18%, while 15-year FRM rates were in the range of 15% to 16%.

Can I predict future mortgage rates based on historical trends?

While historical trends can offer insights into rate patterns, predicting future mortgage rates accurately is challenging. Rates are influenced by numerous economic factors, market conditions, and government policies, making future rate movements uncertain.

Did historical mortgage rates impact housing market trends?

Historical mortgage rates have a significant impact on the housing market. Lower rates tend to increase affordability and stimulate buyer demand, leading to increased home sales and potentially higher home prices. Higher rates can moderate demand and impact affordability.

How do historical mortgage rates affect refinancing?

Historical mortgage rates influence refinancing activity. When rates drop significantly, homeowners may choose to refinance existing mortgages. They can secure lower rates, reduce monthly payments, or access home equity. Higher rates may discourage refinancing.

Where can I find historical mortgage rate data?

Historical mortgage rate data is available from government lenders like Freddie Mac, financial institutions, and reputable financial websites. You can consult mortgage rate charts, and historical databases, or consult with mortgage professionals for accurate and up-to-date information.

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