What is the highest 30 year mortgage rate ever recorded?
30 Year Mortgage Rate in the United States averaged 7.72 percent from 1971 until 2024, reaching an all time high of 18.63 percent in October of 1981 and a record low of 2.65 percent in January of 2021. This page includes a chart with historical data for the United States 30 Year Mortgage Rate.
Interest rates reached their highest point in modern history in October 1981 when they peaked at 18.63%, according to the Freddie Mac data. Fixed mortgage rates declined from there, but they finished the decade at around 10%. The 1980s were an expensive time to borrow money.
Key takeaways. Looking at the past four decades, the average rate on a 30-year fixed mortgage peaked in 1981, rising to roughly 16 percent. The average 30-year fixed rate bottomed in 2021 at just under 3 percent. For much of 2024, the cost of a typical 30-year fixed mortgage had been in the high-6 and 7 percent range.
The Fed funds rate, which is the rate banks charge each other for overnight loans, hit 20 percent in 1980, and 21 percent in June 1981. The cause was an inflationary spiral brought on by rising oil prices, government overspending and rising wages.
The Fed began to raise interest rates in an effort to ease inflation, and mortgage rates followed suit. By mid-May 2022, the average 30-year mortgage rate reached 5.3%, and rates soared past the 6% mark by the end of the year. Rates reached 7.79% in October 2023 — the highest in 20 years.
The same day the Fed cut the federal funds rate, Fannie Mae released its September housing forecast. The organization now predicts 30-year mortgage rates will be at 6.2% by the end of 2024 and 5.7% by Q4 2025.
The Federal Reserve is expected to lower rates by at least 100 basis points through the end of 2024. As such, primary mortgage rates could fall by as much as 60 bps over the next year — and by even more if the rates market begins to price in more cuts than are currently expected.
What's the Highest Mortgage Rate in History? From 1971 to present, the highest average mortgage rate ever recorded was 18.63% in October 1981. Mortgage rates held steady above 18% in the two-month span between Sept. 10 and Nov.
Market Expectations
However, if the Fed does cut rates more aggressively than expected, maybe mortgage rates could move lower. Broadly speaking, the market is projecting that short-term interest rates will end 2024 at close to 4% and then be in the region of 3% in December 2025.
Making 2 extra mortgage payments a year can lead to substantial savings on interest and help you pay off your mortgage years earlier. However, the exact impact depends on a few different factors, including your loan terms, interest rate, and how early in the loan term you start making additional payments.
When was the mortgage rate 18%?
Mortgage rates have fluctuated dramatically in the last 50 years of recorded data by Freddie Mac. While rates peaked at 7.79% in October 2023, this still pales compared to the spikes in the early 1980s when the 30-year fixed rate exceeded 18%.
The lowest average mortgage rates on record came about when the Federal Reserve lowered the federal funds rate in 2020 and 2021 in response to the pandemic. As a result, the weekly average 30-year, fixed-rate mortgage fell to 2.65%, while the average 15-year, fixed-rate mortgage sunk to 2.10%.
The 80s was an era of creative home financing
Two of the biggest strategies that you may have also heard of currently include assumable loans and mortgage rate buy-downs. Assumable loans helped to keep the real estate market plugging along during the early 80s when mortgage rates climbed higher than we have ever seen.
Near the end of October 2022, the 30-year mortgage rate jumped from 6.94% to 7.08%, according to Mortgage buyer Freddie Mac. Prior to that, the last time the average mortgage rate hovered around 7% was in April of 2002.
30 Year Mortgage Rate in the United States averaged 7.72 percent from 1971 until 2024, reaching an all time high of 18.63 percent in October of 1981 and a record low of 2.65 percent in January of 2021. This page includes a chart with historical data for the United States 30 Year Mortgage Rate.
This means a 7% interest rate would earn around 15X more than the national average. At the moment, there are no banks or credit unions currently offering 7% interest on savings accounts, but that doesn't mean you won't ever find a rate that high or won't be able to access another impressive APY on savings.
Yes, mortgage rates are likely to go down in 2025. Average 30-year mortgage rates are currently below 6%, and they may fall further into the 5% range next year.
The current Fed rate is 4.75% to 5.00%.
However, increases should slow between 2024 and 2026, and rates may even decline in 2027. Among the factors that could impact mortgage rates in the next 5 years are inflation, Federal Reserve policy, and economic growth. Homebuyers should consider locking in a low mortgage rate now, as rates are expected to rise soon.”
By Q4 2025, Fannie Mae expects the 30-year fixed mortgage rate will average out at 6.2%. The MBA expects 6.0%, while Wells Fargo forecasts 5.9%.
What is the mortgage rate forecast for the next 5 years?
Fannie Mae's August 2024 forecast (its latest at the time of writing) predicts that 2025 rates will start at 6.2% and trickle downwards by 0.1% each quarter, landing somewhere near 5.9%. Freddie Mac hasn't officially predicted where rates would start or end in 2025, but it does seem to agree with its sister agency.
In general, most of 2024 will be tough for homebuyers due to high home prices and high mortgage rates. But as rates drop, those tough conditions should ease a bit.
2021: The lowest 30-year mortgage rates ever
And it kept falling to a new record low of just 2.65% in January 2021. The average mortgage rate for that year was 2.96%.
Under the criminal usury statute, the maximum interest that can be charged is 25%.
| Institution Name | APY | Compounding Method |
|---|---|---|
| MyBankingDirect.com | 5.35% | Manual |
| UFB Direct | 5.35% | Daily |
| Western Alliance Bank | 5.31% | Monthly |
| LendingClub Bank | 5.30% | Monthly |
