Mortgage Rates Today, Monday, October 26: Back Up

After a sizable drop at the end of last week, mortgage rates are back up again today. The average interest rate on a 30-year, fixed-rate mortgage jumped to 7.20% APR, according to rates provided to NerdWallet by Zillow. This is 12 basis points higher than Friday but three basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.Rates fell last week in response to news from specific sectors, namely AI. With a slate of major economic reports and meetings scheduled for this week, we could see lenders reacting to analysis of the economy as a whole over the coming days. Average mortgage rates, last 30 days🤓 Kate on Rates, 10/22/26📈 What influences mortgage rates? Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news ... you name it. For example, even tiny changes in the bond market can shift mortgage pricing.Last week, mortgage rates went down as investor anxiety about whether tech companies will actually turn a profit from AI drove a flight to quality — basically, investors turning to Treasuries as a more reliable and theoretically lower risk investment. More demand for Treasury bonds drove prices up and yields down. (Yields are the return investors get on bonds, and they move inversely to prices.) Mortgage rates are generally benchmarked to the yield on the 10-year Treasury, so we saw mortgage rates drop.Why were investors feeling jittery about AI? A lot of their nerves were driven by something we talk about all the time when we're discussing mortgage rates: Inflation. Tech companies have been borrowing lots (in many cases, by issuing corporate bonds) to fund AI buildout.But if prices are climbing, the costs of building data centers and other AI infrastructure will increase, too. In order to get solid returns on these investments and pay back their bondholders, tech companies are going to have to make some serious profits — and that seems to be where some investors have been experiencing misgivings.This week is arguably all about inflation. The Federal Open Market Committee meets Tuesday and Wednesday, and while the Fed isn't expected to change the funds rate at this meeting, its outlook on inflation is influential. Markets will be listening closely to Fed chair Kevin Warsh's post-decision press conference for any clues as to the central bankers' next steps.And Thursday, we'll get September inflation data from the Bureau of Economic Analysis. While those Personal Consumption Expenditures numbers come out a day too late to be helpful to the Fed, they'll still provide evidence of how inflation is trending.What it will all mean for mortgage rates is where it gets tricky.On one hand, when it looks like inflation's running hot, that generally means higher rates — bonds are usually less attractive to investors (so yields go up), plus the Fed is more likely to raise the funds rate. The Federal Reserve doesn't set mortgage rates, but any adjustments to the federal funds rate ripple out to every corner of the economy, and mortgage rates are no exception.But on the other hand, persistent inflation is also very much driving investors' concerns about big tech and AI profits. If that keeps investors interested in bonds, that could send yields — and mortgage rates — lower.Explore mortgages today and get started on your homeownership goalsGet personalized rates. Your lender matches are just a few questions away.Do you want to purchase or refinance?What's your property type?How do you plan to use this property?Won't affect your credit score🔁 Should I refinance?Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs). With rates where they are right now, you may want to start considering a refi if your current rate is around 7.7% or higher — but there just aren't too many people for whom that's true.Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan. If you're looking for a lower rate, use NerdWallet's refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.🏡 Should I start shopping for a home?There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy. 🔒 Should I lock my rate?If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.🧐 Why is the rate I saw online different from the quote I got?The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won't match every buyer's circumstances.In addition to market factors outside of your control, your customized quote depends on your:Credit scoreDebt-to-income ratioEmployment historyDown paymentType of mortgageLocation and property typeLoan amountEven two people with similar credit scores might get different rates, depending on their overall financial profiles.👀 If I apply now, can I get the rate I saw today?Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.