3 surprising mortgage rate facts you may not have known

By now, many homebuyers and owners looking to refinance are well-versed in the basics of mortgage interest rates. Rates were near record lows at the start of the decade, but they surged alongside decades-high inflation in recent years and have since declined again.

To get a low mortgage rate, you'll need to shop around for lenders, apply with a good credit score and clean credit history and be willing to put down a large down payment. Those are some of the items many already know. 

But the mortgage interest rate climate of fall 2025 is a unique one, especially now that the Federal Reserve has embarked on a new interest-rate cutting campaign that has and will continue to impact mortgage rates. In this atmosphere, it can be easy to overlook some important facts. Understanding these surprising mortgage rate facts can better inform your decision-making now and potentially even save you some money over the life of your mortgage loan. Below, we'll examine three mortgage rate facts you may not have even known about.

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3 surprising mortgage rate facts you may not have known

You can't be too informed when it comes time to purchase a home or refinance an existing one, considering the amount of money at stake. To that end, here are three mortgage rate facts you may not have been aware of:

Mortgage rates have actually been declining for most of 2025

Sure, the big news in the mortgage rate space was the three-year low rates dropped to in September and the subsequent minor declines they experienced in the weeks that followed. But, overall, mortgage rates have actually been declining for most of 2025. 

Rates right now are closing in on 6% but they started the year around 7%, offering real relief both for buyers previously stuck on the sidelines and homeowners saddled with existing rates in the 7% to 8% range. In other words, while the rate drops in recent weeks have been significant, this is not a new phenomenon. It's been slowly but steadily occurring all year long.

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They don't always decline neatly alongside Fed rate cuts

There's a widely held belief that mortgage rates move up and down neatly alongside the Fed. So, this thinking goes, if the Fed cuts rates, mortgage rates will follow and vice versa. But that's a misconception that was disproved within the last year. Remember that average 7% mortgage rate from January? That came after the Fed cut rates in September, November and December 2024, respectively. 

That's because multiple factors impact mortgage rates (more on that below). But it's also because lenders take motivation from the Fed's policies, but aren't directly dictated by them. This is why many may see the same mortgage rates listed online today as they do after next week's Fed meeting, in which rates are expected to be reduced again. Many lenders, however, will "price in" these presumed cuts in their offers to borrowers in advance, again proving that there's not a linear relationship between Fed rate cuts and mortgage interest rates.

Multiple factors impact mortgage rates

The Fed is just one of multiple factors that impact mortgage interest rates. The 10-year Treasury yield is also a major one. Mortgage rates rise when the yield increases, and the opposite is often true. This is why the mortgage rate space has been a bit uneven over the past year, even when the Fed issued multiple cuts. 

The 10-year Treasury yield movement, or lack thereof, can hinder the impact Fed rate cuts would normally have. And, of course, your specific lender profile goes a long way toward impacting the mortgage rate you're ultimately offered. Even in an ideal climate, if you come to a lender with a subpar credit score, a need for private mortgage insurance (PMI) and an uneven credit history, your rate will almost assuredly be higher than what other borrowers would receive.

The bottom line

To improve your chances of homebuying or refinancing success, it's important to be as informed as possible. By understanding the basics of buying and refinancing, but also the intricacies and lesser-known facts, you can make a better, more cost-effective decision. Take the time, then, to do your research, speak with lenders and other homeowners and consider real estate agents who can help you make the right move at the right time. It took a long time for mortgage rates to become affordable again, so you'll want to utilize this moment in time as effectively as possible.