Money isn't cheap right now, but it’s finally getting a little less expensive. If you’ve been sitting on the sidelines waiting for the "perfect" moment to buy a house or finance a car, you’ve probably noticed that the vibe in the market has shifted. It’s less chaotic than 2024, yet nowhere near the "free money" era of 2021.
Basically, the national average for a 30-year fixed mortgage sits at 6.11% as of January 18, 2026.
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That’s a massive relief compared to the 7% and 8% peaks we saw not long ago. But here is the thing: the "headline" rate you see on the news is rarely what you actually get at the closing table. Real life is messier.
Interest rates today: The reality check
Honestly, tracking interest rates is like trying to nail Jell-O to a wall. Most people look at the Federal Reserve and assume that if the Fed cuts rates, their mortgage drops the next morning.
It doesn't work that way.
Mortgage rates are more closely tied to the 10-year Treasury yield, which is currently hovering around 4.23%. When investors get nervous about the economy or see the government spending like crazy, they demand higher yields on those bonds. Since banks use those yields as a benchmark, your mortgage rate follows suit.
Right now, we are seeing a strange tug-of-war. On one hand, the Fed has been slowly trimming the federal funds rate—which now sits in a range of 3.50% to 3.75%. On the other hand, political volatility and massive government bond issuances are keeping a "floor" under how low rates can actually go.
What the numbers look like right now
If you went out today to get a loan, here is roughly what you'd be looking at across the board:
- 15-Year Fixed Mortgage: Averaging around 5.47%. It’s the sweet spot for people who can handle the higher monthly payment to save six figures in interest over the long haul.
- 30-Year Refinance: These are surprisingly higher, sitting near 6.56%. Lenders are being stingier with refis because they aren't as desperate for the volume as they are with new purchases.
- The Prime Rate: This one is steady at 6.75%. This is the big one for business owners and anyone with a HELOC.
- Auto Loans: You’re looking at about 7.00% for a new car if your credit is decent. If you’re buying used, expect closer to 7.40%.
The Trump effect and the Fannie/Freddie wildcard
We can't talk about interest rates today without mentioning the massive pivot in housing policy. Just this past week, the market caught a major jolt. President Trump announced a directive for Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities.
That is a huge deal.
Usually, the "spread"—the gap between the 10-year Treasury and mortgage rates—is about 2%. When the government steps in to buy these securities, it artificially pushes mortgage rates down. That's why we saw the 30-year rate dip toward the 6% mark so quickly this month.
But there’s a catch.
While this helps home buyers, it makes some economists sweat about inflation. If the government pumps that much liquidity into the market, it can keep prices high because people have more "buying power." It’s a classic "damned if you do, damned if you don't" scenario.
Why your credit score matters more than the Fed
You’ve probably heard people complain that they can’t find that 6.11% rate anywhere.
That’s because the "average" is based on someone with a 740+ credit score and a 20% down payment. If your score is 660, you aren't getting 6.11%. You’re likely looking at 6.8% or higher.
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Credit card APRs are even more brutal. The average variable rate is still stuck near 19.64%. Even though the Fed has cut rates by 1.75% since the peak, credit card companies are incredibly slow to pass those savings on to you. They are quick to raise them, though. Funny how that works.
The 2026 forecast: Will they keep dropping?
If you're waiting for 4% or 5% mortgage rates, you might be waiting a long time.
J.P. Morgan’s Michael Feroli recently suggested that the Fed might actually pause their rate cuts for the rest of 2026. Why? Because the economy is weirdly resilient. Unemployment is staying low enough that the Fed isn't in a "panic" to stimulate things.
Most analysts, including those at Goldman Sachs, expect maybe one or two more tiny cuts this year. They see the "terminal rate" (the place where the Fed finally stops) being around 3.25%.
What to do if you need to borrow now
Stop trying to time the bottom. You won't. Nobody does.
If you find a house you love and the math works at 6.1%, buy it. You can always refinance if rates hit 5% in 2027. If you wait, and rates go back to 7% because of an inflation spike, you’ve lost your window.
Specific steps to take right now:
- Check your DTI: Your debt-to-income ratio is being scrutinized more than ever. Pay down that high-interest credit card (the one at 24%) before applying for a mortgage.
- Look at Credit Unions: While big banks are stuck at 16% for personal loans, credit unions are averaging closer to 12.87%. That’s a massive spread.
- Shorten the term: If you can swing the payment on a 20-year or 15-year mortgage, you’ll likely get a rate in the mid-5s today.
The era of easy money is over, but the era of "impossible" money is ending too. We’re settling into a new normal where 6% is actually a pretty decent deal.
Start by pulling your actual middle credit score from all three bureaus. Most lenders use the "lower of the middle" score, so knowing your real standing is the only way to see if you’ll actually qualify for the rates being advertised today. Once you have that, shop at least three different lenders—specifically one online-only lender, one big bank, and one local credit union—to see who is hungriest for your business.