Mortgage Interest Rates Today: Rates Up to 6.10% After Fed Hits Pause on Cuts

Mortgage rates rose on Thursday, a day after Federal Reserve policymakers opted to hold mortgage rates steady, despite continued pressure from the President. Donald Trump for more cuts.

The average rate on a 30-year fixed-rate mortgage rose to 6.10% for the week ending Jan. 29, from 6.09% the previous week, according to Freddie Mac. In view, rates reach 6.95% during the same period in 2024.

“The loan amount remains at the lowest level in three years, which encourages potential home buyers who have been waiting a long time to enter the market,” he said. Sam KhaterFreddie Mac’s chief economist.

“Lower rates, combined with strong income growth, have led to a continued increase in purchase applications compared to last year. We are also seeing more homeowners refinancing their mortgages to take advantage of these lower rates, as evidenced by the increase in repurchase applications over the past year.”

Although the federal fund rate does not directly set borrowing costs, the central bank’s stance informs bond markets, particularly the 10-year Treasury yield, which closely follows the borrowing rate.

Realtor.com® Economist Jiayi Xu says the Federal Open Market Committee’s 10-2 vote to keep the benchmark rate unchanged at the current 3.5% to 3.75% “reinforces the view that policymakers remain cautious and data-driven, waiting for clear evidence that inflation is moving further toward target before easing policy.”

The Federal Reserve’s dual congressional mandate is to use monetary policy to maintain price stability and encourage higher employment.

Meanwhile, January consumer confidence fell to its lowest level in more than a decade, reflecting growing concerns about the job market and the broader economy—conditions that could dampen demand for housing.

“Adding to this uncertainty, ongoing political tensions are contributing to the volatility of Treasury yields, making it more likely that mortgage rates will remain stable rather than fall sharply in the near term,” Xu said.

Despite the 30-year mortgage rate rising to the low 6% range, the cost of borrowing remains high enough to discourage and keep many home sellers on the sidelines, limiting new listings.

The latest mortgage data shows that loans with rates above 6% now outnumber those below 3%, indicating that some buyers and sellers are moving forward despite higher financing costs.

“Taken together, these signs point to a market that is gradually turning to higher prices,” Xu said. “While slightly better prices have supported a modest increase in sales and eased affordability pressures, the recovery is expected to be slow and uneven until prices fall further and supplies expand further.”

How are loan amounts calculated?

Home loan rates are determined by critical calculations that factor into a person’s economic situation and financial health. They are closely linked to the 10-year Treasury bond yield which reflects broader market trends, such as economic growth and inflation expectations. Lenders refer to this ratio before increasing their margin to cover operating costs, risk, and profit.

When the economy shows warning signs of inflation, Treasury yields typically rise, causing mortgage rates to rise. Conversely, signs of inflation or weakness in the labor market often send Treasury yields lower, causing loan rates to fall.

The loan rates offered by the lender, however, go beyond these benchmarks and take into account some of your personal factors.

Your lender will take a close look at your financial health—including your credit score, loan amount, property type, down payment size, and loan term—to determine your risk. Those with strong financial profiles are considered low risk and generally receive lower rates, while borrowers considered high risk receive higher rates.

How your credit score affects your mortgage

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

The credit score you need will vary depending on the type of loan. 620 points is the “correct” rating. However, people applying for a Federal Housing Administration loan can be approved with a credit score of 500, which is considered the minimum score.

Home buyers with credit scores of 740 or higher are generally considered to be in excellent standing and can often qualify for better rates.

Different types of home loan programs have their own minimum credit score requirements. Some lenders have strict criteria when evaluating whether to approve a loan. They want to make sure you can repay the loan.