Mortgage interest rates fall to 3-year low
For the first time in more than three years, interest rates on a 30-year fixed-rate mortgage have fallen below 6%.
This is positive news for any potential homebuyers or current homeowners looking to refinance. Lower mortgage rates could reduce the amount of interest you pay on your home loan. The last time rates for a 30-year fixed-rate mortgage were this low was in September 2022.
Take advantage of the current rate drop and connect with a Loan Officer when you start an application.
What recently happened to mortgage rates?
As of Jan. 9, 2026, rates on a 30-year fixed-rate mortgage have fallen to 5.99%, according to Mortgage News Daily. This is a drop of 22 basis points in just one day.
From Sept. 9, 2022, when rates were at 5.97%, to today, interest rates on a 30-year fixed rate mortgage have stayed above 6%.
Why are mortgage interest rates falling?
The fall in mortgage rates is a result of President Donald Trump’s announcement that he is directing the federal government to purchase $200 billion in mortgage bonds.
In a social media post announcing his plans, Trump said that this “will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
The president has tasked government-sponsored entities Fannie Mae and Freddie Mac with making the $200 billion dollars in purchases.
The immediate market reaction to this news was positive, as mortgage rates fell after the announcement.
What does this mean for homebuyers, refinancers and HELOC borrowers?
An interest rate drop can make homeowning and refinancing more affordable for potential buyers and borrowers.
Lower interest rates tend to mean lower interest payments on mortgages. This can make homeownership more affordable for anyone hoping to enter the housing market. Those looking to refinance their current mortgage or access their home equity through a home equity loan or HELOC could also be able to take advantage of lower interest payments when mortgage rates fall.
Any homeowner with an adjustable rate on their original mortgage, second mortgage or home loan could notice their interest payments drop alongside the rates.
The last time the Federal Reserve bought mortgage bonds during a time of economic turmoil, lenders saw an increase in homeowners refinancing to rates of 3%. The end of 2020 and beginning of 2021 saw a massive increase in the volume of loan refinances originated. Mortgage rates at this time briefly dropped below 3%.
What could come next for mortgage rates?
If everything works out as Trump plans, mortgage rates could continue to fall as bonds are bought. However, the market can be volatile, making it hard to accurately predict where mortgage rates are heading.
Due to the unpredictable nature of the market, it is best not to wait for rates to drop to get a home loan, as you do not know how long that will take. Instead, it is smart to apply for a home loan and take advantage of rates after they drop and refinancing your mortgage if you notice interest rates fall further.
If you decide to get a mortgage with plans to refinance when rates fall further, make sure you keep your eye on current mortgage rates.
Which policies would the federal government implement?
Alongside the president’s newly revealed plan to buy $200 billion in mortgage bonds, the administration has also announced it is looking at plans for a 50-year mortgage and ways to reduce closing costs.
A 50-year mortgage would give borrowers two more decades to pay back their home loans. The goal of offering a longer mortgage is to make homeownership more affordable by spreading payments over a greater number of years.
While there has been no word on exactly how it plans to go about reducing closing costs, the Trump administration has said it is exploring options.
How can I start the loan process?
To take advantage of current mortgage rates through a home loan or refinance, you can start the process with an online application.
An online mortgage application with a trusted lender will connect you with a Loan Officer who will be available to help you with the application process and answer any of your questions.
Start your mortgage application today and begin the loan process while taking advantage of the current rate drop.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.
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