The average 30-year fixed mortgage rate was 7.40% on October 8, 2026, up from 6.30% a year ago, according to Freddie Mac. On September 16 the Federal Reserve also raised its key rate by a quarter point to 3.75%–4.00%. On a $320,000 loan, 7.40% costs about $235 a month more than 6.30% would. The Fed meets again October 27–28.
Key takeaways
- Freddie Mac's 30-year fixed mortgage rate averaged 7.40% on October 8, 2026, up from 7.28% the week before and 6.30% a year earlier.
- On September 16 the Fed raised its target range by 0.25 points to 3.75%–4.00%, in a unanimous 12–0 vote.
- On a $320,000 30-year loan, 7.40% means a $2,215.62 monthly payment, about $235 more than the $1,980.71 at last year's 6.30% rate.
- The Fed's next meetings are October 27–28 and December 8–9, so rates can move again before year-end.
Home loans just got more expensive. Freddie Mac’s weekly survey put the average 30-year fixed mortgage rate at 7.40% on October 8, 2026. That’s up from 7.28% a week earlier and 6.30% a year ago.
The Federal Reserve is also in the news. It raised its key interest rate in September. Here’s what both facts mean for your wallet, with a real example you can check yourself.
What are mortgage rates right now?
Freddie Mac publishes an average every Thursday, based on its survey of lenders. The October 8 numbers, straight from its website:
| Loan type | Oct. 8, 2026 | Week before | Year ago |
|---|---|---|---|
| 30-year fixed | 7.40% | 7.28% | 6.30% |
| 15-year fixed | 6.73% | 6.60% | 5.53% |
That’s an average. Freddie Mac itself reminds borrowers to shop around and get multiple quotes. Your own rate depends on your credit, your down payment and the type of loan.
What did the Fed do in September?
The Fed is the U.S. central bank. Its main tool is the federal funds rate, which is the rate banks charge each other for overnight loans. On September 16, 2026, the Fed’s rate-setting committee voted 12–0 to raise the target range by a quarter of a percentage point, to 3.75%–4.00%.
At its July meeting, the committee had held the range at 3.50%–3.75%. In September, it said inflation “remains elevated” and that the move “will support a timelier return” to its 2 percent goal.
The Fed’s latest daily rate report shows the effective federal funds rate at 3.88% and the bank prime loan rate at 7.00% on October 8.
Does the Fed set my mortgage rate?
No. The Fed does not set mortgage rates. Lenders set them, and Freddie Mac’s survey just reports what they’re charging. A Fed hike and higher mortgage rates can show up around the same time, but they are two different numbers. This article doesn’t claim that one caused the other.
What the Fed’s rate does touch is the cost of borrowing in general. If you have a loan with a rate that can change, such as an adjustable-rate mortgage, a home equity line or a credit card, check your paperwork to see how your rate is set. If you have a fixed-rate mortgage, your rate and payment don’t change.
How much more does a 7.40% mortgage cost?
Here is an illustration, not a quote. Say you buy a $400,000 home with 20% down. The down payment is $80,000, so you borrow $320,000. We use a standard 30-year loan and show principal and interest only. Taxes, insurance and any mortgage insurance would be extra.
| Rate | Monthly payment | Total interest over 30 years |
|---|---|---|
| 6.30% (a year ago) | $1,980.71 | $393,057 |
| 7.28% (Oct. 1) | $2,189.48 | $468,213 |
| 7.40% (Oct. 8) | $2,215.62 | $477,622 |
The math: at 7.40% you pay $2,215.62 − $1,980.71 = $234.91 more per month than at last year’s rate. That’s about $2,819 a year ($234.91 × 12). Over the full 30 years the extra interest adds up to $477,622 − $393,057 = $84,565.
Even one week’s move matters. From 7.28% to 7.40%, the payment rises by $2,215.62 − $2,189.48 = $26.14 a month.
A shorter loan changes the picture. A 15-year loan on the same $320,000 at 6.73% costs about $2,828 a month, but total interest is only about $189,069. The payment is higher, so it only works if your budget can handle it.
Why would the Fed raise rates?
The Fed has a goal of 2 percent inflation. Its September statement said inflation “remains elevated” and that the rate increase “will support a timelier return” to that goal.
The same statement described the economy as expanding “at a solid pace,” with strong productivity and job gains that “have kept pace with the workforce.” That mix is why the committee, which had been split 9–3 in July, voted unanimously to raise rates in September.
Who feels higher rates the most?
People shopping for a new mortgage feel it first, because they lock in whatever rate lenders offer that day. Buyers with smaller down payments borrow more, so the same rate change costs them more each month. Our example borrower puts down 20%. If you borrow $360,000 instead, every number in the table gets about 12.5% bigger.
Homeowners with a fixed rate below today’s rates are in a different spot. Their payment stays put. That’s a good reason not to refinance unless the new rate is clearly lower.
What happens next?
The Fed’s calendar lists two meetings left in 2026: October 27–28 and December 8–9. The Fed announces its decision in a statement at the end of each meeting.
Nobody knows what it will decide. The sensible move is to plan for a range of rates and not bet on one. Test your budget at today’s rate and at a rate a little higher.
What to do now
- Set your real budget. Decide the monthly payment you’re comfortable with, including taxes and insurance, not just the loan payment.
- Run your own numbers. Try 6.5%, 7% and 7.5% in our mortgage calculator to see how your payment changes.
- Get several quotes. Ask at least three lenders for written estimates on the same day, and compare both the rate and the fees.
- Check your current loan. If you have an adjustable rate, find out when it can change and by how much. If you already have a fixed rate, no action is needed.
- Think about refinancing only if the math works. With rates this high, a refinance usually only helps if your new rate would be lower. Use the refinance calculator to compare.
- Look at other debts. Variable-rate credit cards and loans may cost more. The loan calculator can show what a payment on a loan looks like at different rates.
- Check back after October 28. The Fed’s next decision could change the conversation again.
This article is general information, not personal financial advice.
Frequently asked questions
What is the average mortgage rate today?
Freddie Mac's latest weekly survey, dated October 8, 2026, shows the 30-year fixed rate averaging 7.40% and the 15-year fixed averaging 6.73%. Freddie Mac updates these numbers every Thursday. The survey is an average, so the rate a lender offers you can be higher or lower depending on your credit, down payment and loan type.
Did the Fed raise interest rates in September 2026?
Yes. On September 16, 2026, the Federal Open Market Committee voted 12–0 to raise the target range for the federal funds rate by a quarter of a percentage point, to 3.75%–4.00%. It had held the range at 3.50%–3.75% at its July meeting. The Fed said the move will support a timelier return to its 2 percent inflation goal.
When is the next Fed meeting?
The Federal Reserve's calendar lists the next two meetings of 2026 as October 27–28 and December 8–9. The Fed announces its decision at 2 p.m. Eastern on the last day of each meeting. Nobody can say in advance what it will decide, so it's best to plan around a range of possible rates rather than a single guess.
Does a Fed rate hike raise my mortgage payment?
Not directly if you have a fixed-rate mortgage. Your rate and payment stay the same for the life of the loan. The Fed's key rate does matter if your loan has a rate that can change, such as an adjustable-rate mortgage, so check your loan documents. A rate hike mainly affects the rates new borrowers are offered.
Should I wait for mortgage rates to come down before buying?
That depends on your situation, and no one can promise where rates will go. Waiting can cost you if prices rise or you need to move, and buying now can cost more each month. A fair approach is to figure out the highest payment you're comfortable with, then test it at several rates with a mortgage calculator.
How can I get a lower mortgage rate?
Freddie Mac says shopping around and getting multiple quotes can potentially save thousands of dollars over the life of a loan. Compare the interest rate and the fees on each offer. A bigger down payment, a stronger credit score and a shorter loan term can also change the rate you're offered. Ask each lender for a written estimate on the same day.