Mortgage Rates Today, Thursday, February 26: Higher But Still Seeing Fives

Mortgage interest rates moved higher today, but we’re still seeing lenders quoting sample APRs below 6%. We last saw rates this low back in September 2022.

The average interest rate on a 30-year, fixed-rate mortgage rose to 5.93% APR, according to rates provided to NerdWallet by Zillow. This is 12 basis points higher than yesterday and 16 basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

If you want to know “when will mortgage rates drop?”, guys — they have. If you want to know why they’re dropping, that’s a much more complicated answer. We’ll dive into it below the graph.

Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.

Judging by all our usual frontstage indicators — stuff like inflation data and Federal Reserve antics — mortgage rates should be rising. But NerdWallet’s mortgage index, which uses rates provided by Zillow, has seen 30-year fixed rates below 6% since Feb. 13. That was on the early side, but not that early: I started seeing lenders quote rates that began with five on Feb. 17, and that timing may have been influenced by the three-day weekend (I don’t look at mortgage rates on my days off, guys. Boundaries are important.).

Since big data drops and economic headlines are making it seem like rates should be higher, we need to look behind the scenes to see why mortgage rates are actually going lower. Oh, it is about to get wonky in here.

Mortgage rates are lowkey benchmarked to 10-year Treasury notes, since mortgages behave similarly — even though most home loans have 30-year terms, realistically, most homeowners sell or refinance long before then. Mortgage-backed securities, or MBS (investments that are basically bundles of similar home loans) are slightly riskier than the 10Y T-note, since borrowers can end their loans early with a sale or refi, or they can go into default. As such, there’s always a spread between mortgage rates and the 10YT; mortgage rates are higher to account for the added risk.

Some have noted that Treasury yields have fallen in recent days, as investors reacted not so much to the Supreme Court’s tariff ruling on Feb. 20 but to the president’s reaction. Fears of a trade war are generating a flight to safety, which means investors are ditching stocks for more reliable bonds. When there’s more demand for bonds, yields go down. That’s because while bond prices may be rising, the amount they pay out — referred to as the coupon rate, but it’s basically interest — doesn’t change.

Mortgage rates and 10-year Treasuries tend to move together, so it makes sense that yes, as yields drop, rates should fall, too. As I keep saying though, 30-year fixed mortgage rates that started with five were being spotted in the wild well before the Feb. 20 Supreme Court ruling. There’s more going on.

Mortgage rates and 10YT yields move together, but they don’t have to move in parallel. As it turns out, the spread between mortgage rates and 10YT yields (often referred to as the mortgage spread) has been narrowing. Remember from three paragraphs ago when I said mortgage-backed securities are always riskier than Treasuries, so there’s always a premium that’s reflected in mortgage rates? The spread narrowing implies that, somehow, mortgages have gotten less risky.

Here’s how. If you’ve read this far, you likely recall that back in January, President Trump ordered a $200BN MBS purchase (you mostly might remember because when that happened, mortgage rates abruptly dropped). At the time, a key criticism was that a one-time cash infusion wouldn’t have much effect, unlike the steady MBS purchases the Federal Reserve has made to shore up the housing market during times of economic crisis. Basically, when mortgage lenders know there’s a buyer for the loans they’re selling, it allows them to lower mortgage interest rates.

The Federal Reserve has backed off from purchasing MBS, but it’s looking more and more like behind the scenes, government-sponsored enterprises Fannie Mae and Freddie Mac have stepped in. Looking at last year, the GSEs have been buying billions of dollars worth of MBS each month, with purchases trending upward as the year went on. (The most recent numbers are from December 2025 — I’d love to see January 2026.)

Fannie and Freddie made even more significant increases to their portfolio holdings — in other words, buying mortgages on the secondary market but then keeping them on their own books rather than bundling them into MBS to be sold off. Between January and December 2025, Fannie Mae’s retained mortgage portfolio grew nearly 60%, while Freddie Mac’s mortgage-related investments portfolio rose roughly 43%.

Why would Fannie and Freddie start hanging on to more loans? We could totally speculate on that. But what I’m wondering is whether the one-two combo of the GSEs creating fewer MBS (by hanging on to loans) as well as buying up more MBS is helping drive rates down, by simultaneously limiting supply and increasing demand.

Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).

With rates where they are right now, you could start considering a refi if your current rate is around 6.43% or higher.

Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.

If you’re looking for a lower rate, use NerdWallet’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.

There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.

If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.

NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.

If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.

Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.

The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.

In addition to market factors outside of your control, your customized quote depends on your:

Even two people with similar credit scores might get different rates, depending on their overall financial profiles.

Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.