Historical mortgage rates: How interest rates have shifted over time

Quick insights

• Mortgage rates have historically shifted with broader economic conditions; times of high inflation, moves by the Federal Reserve and economic crises mark significant changes.
• The highest interest rates in history appeared in the 1980s, while the lowest rates on record appeared in the early 2020s.ec-fred-stlouis
• Reviewing historical mortgage rates can help contextualize present rates and inform your decisions about when to purchase a home.

For those planning to buy a home, few financials factors tend to be as important as the mortgage interest rate. It’s often the first thing people think about when reviewing their loan options. Besides the personal financial factors that can influence the rates you’re offered, broader conditions contribute to the rates seen throughout the market.

In this article, we’ll explore mortgage rates over time, beginning in the 1970s. This decade serves as a good starting point because Freddie Mac (a prominent government-sponsored enterprise) began tracking average mortgage rates in 1971.ec-fred-stlouis All specific rates seen in this article will be provided by the St. Louis Federal Reserve, based on Freddie Mac’s data collection. We’ll also explore some of the economic conditions which may have contributed to rises and falls in historic mortgage rates.

Why history matters: Lessons for today’s homebuyers

Reviewing mortgage rate history can help contextualize the current rates of the day. Understanding how rates tend to change can also assist you in your long-term financial planning. For example, if rates are very high, you may decide to delay a purchase for a while, or if they’re low, it could be a sign to move forward. Knowing historical rates can also prepare you to manage your risk with an adjustable-rate mortgage (ARM), which has a variable rate that fluctuates with the market.

Decade-by-decade: Mortgage rates over time

In this section, we will present the highest recorded year of each decade, the lowest recorded year and the average, focused on the rates for 30-year mortgages.

Mortgage rates in the 1970s

• Year with the highest rate: 1979 (12.90%)ec-fred-stlouis
• Year with the lowest rate: 1972 (7.23%)ec-fred-stlouis
• Average for a 30-year mortgage: 8.9%ec-fred-stlouis

In the 1970s, Freddie Mac began tracking interest averages for 30-year mortgages. This decade saw the rise of what’s often referred to as the “Great Inflation,” a time of unprecedented inflation as measured by the consumer price index.ec-fed-great-inflation

Mortgage rates in the 1980s

• Year with the highest rate: 1981 (18.63%)ec-fred-stlouis
• Year with the lowest rate: 1987 (9.03%)ec-fred-stlouis
• Average for a 30-year mortgage: 12.71%ec-fred-stlouis

The Great Inflation continued into the 1980s, producing the highest interest rates on record. In December 1980, the Fed raised the federal funds rate to steady economic activity and manage inflation, which in turn sent the prime rate to its all-time peak of 21.5%.ec-bnk-rate-prime-rt By 1981, mortgage rates rose to their own all-time high of 18.63%.ec-fred-stlouis

Mortgage rates in the 1990s

• Year with the highest rate: 1990 (10.67%)ec-fred-stlouis
• Year with the lowest rate: 1998 (6.49%)ec-fred-stlouis
• Average for a 30-year mortgage: 8.12%ec-fred-stlouis

As economic conditions began to stabilize, interest rates began to decline from their peak. This decade saw an unprecedented boom in homeownership, with more than seven million buyers taking the plunge between 1994 and 1999.ec-jchc-hsing-studies

Mortgage rates in the 2000s

• Year with the highest rate: 2000 (8.64%)ec-fred-stlouis
• Year with the lowest rate: 2009 (4.71%)ec-fred-stlouis
• Average for a 30-year mortgage: 6.29%ec-fred-stlouis

Interest rates remained low throughout the 2000s, leading up to the 2008 financial crisis. This crisis is thought to have been brought on by the bursting of the U.S. housing bubble, caused in part by the rise of “subprime” mortgages, where many borrowers were approved for risky home loans.ec-cfr-fin-crisis

Mortgage rates in the 2010s

• Year with the highest rate: 2010 (5.21%)ec-fred-stlouis
• Year with the lowest rate: 2012 (3.31%)ec-fred-stlouis
• Average for a 30-year mortgage: 4.09%ec-fred-stlouis

The economy began to slowly recover as efforts by the Federal Reserve began to make an impact.ec-cfr-fin-crisis However, in 2010 buyer skepticism was still high, and the start of this decade saw a sharp decline in the number of single-family homes sold.ec-hud-user-hsing-10ec-hud-user-hsing-10

Mortgage rates in the early 2020s

As of June 2025:

• Year with the highest rate: 2023 (7.79%)ec-fred-stlouis
• Year with the lowest rate: 2021 (2.65%)ec-fred-stlouis
• Average for a 30-year mortgage: 5.14%ec-fred-stlouis

The lowest rates in history were recorded during the COVID-19 pandemic, reaching an ultimate floor on January 7, 2021, at 2.65%.ec-fred-stlouis With the decade only half-over, it remains to be seen how interest rates will progress.

Factors that may impact mortgage rates

Let’s name some of the conditions that affect mortgage rates throughout the years:

• Inflation: Times of high inflation (when the prices of goods and services rise) often coincide with times of higher mortgage rates. Inflation may increase the price of homes, which can reduce demand, but mortgage rates tend to rise as well.ec-yahoo-mtrg-rates
• Decisions made by the Federal Reserve: The Fed sometimes adjusts the federal funds rate, which directly influences mortgage rates.
• Effects of economic crises: Times of economic downturn (recession) are often associated with falling interest rates.ec-investopedia Likewise, times of general financial prosperity can result in lower interest rates.

In summary

Interest rates for mortgages are bound to rise and fall with the times, depending on factors such as inflation, economic downturn and Federal Reserve decisions. Reviewing historic mortgage rates can help you understand the present economic conditions and speculate about the future. If you’re curious about the current rate you may be approved for, consider touching base with a Chase Home Lending Advisor who can discuss your options.