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Historical Mortgage Rates: Averages and Trends from the 1970s to 2017

Over the past 45 years, interest rates on the 30-year fixed-rate mortgage have ranged from as high as 18.63% in 1981 to as low as 3.31% in 2012. Mortgage rates today remain at historical lows, with over 60% of mortgage holders paying rates between 3.00% and 4.90% as of 2015. We used interest rate data from Freddie Mac's Primary Mortgage Market Survey (PMMS) to examine historical mortgage rates and the factors that have impacted their downward trend.

Mortgage Rate History: 1971 to Today

Homebuyers who have recently borrowed fixed-rate mortgages have benefited from interest rates at historical lows. After reaching a high of nearly 19% in 1981, mortgage rates have steadily declined and remained in the low single digits. Since the housing crisis in 2008, rates have consistently stayed under 6%, with the rate on 30-year fixed-rate mortgages bottoming out at 3.31% in November 2012.

Time series showing the annual average of interest rates for 30-year fixed-rate mortgages from 1971 to 2017
YearLowest RateHighest RateAverage Rate
20173.89%4.30%4.10%
20163.41%4.32%3.65%
20153.59%4.09%3.85%
20143.80%4.53%4.17%
20133.34%4.58%3.98%
20123.31%4.08%3.66%
20113.91%5.05%4.45%
20104.17%5.21%4.69%
20094.71%5.59%5.04%
20085.10%6.63%6.03%
20075.96%6.74%6.34%
20066.10%6.80%6.41%
20055.53%6.37%5.87%
20045.38%6.34%5.84%
20035.21%6.44%5.83%
20025.93%7.18%6.54%
20016.45%7.24%6.97%
20007.13%8.64%8.05%
19996.74%8.15%7.44%
19986.49%7.22%6.94%
19976.99%8.18%7.60%
19966.94%8.42%7.81%
19957.11%9.22%7.93%
19946.97%9.25%8.38%
19936.74%8.07%7.31%
19927.84%9.03%8.39%
19918.35%9.75%9.25%
19909.56%10.67%10.13%
19899.68%11.22%10.32%
19889.84%10.77%10.34%
19879.03%11.58%10.21%
19869.29%10.99%10.19%
198511.09%13.29%12.43%
198413.14%14.68%13.88%
198312.55%13.89%13.24%
198213.57%17.66%16.04%
198114.80%18.63%16.64%
198012.18%16.35%13.74%
197910.38%12.90%11.20%
19788.98%10.38%9.64%
19778.65%9.00%8.85%
19768.70%9.10%8.87%
19758.80%9.60%9.05%
19748.40%10.03%9.19%
19737.43%8.85%8.04%
19727.23%7.46%7.38%
19717.29%7.73%7.54%
Overall3.31%18.63%8.21%

Note that 2017 rates reflect Fannie Mae PMMS data through June 8, 2017.

In 1971, when Freddie Mac began surveying lenders for mortgage data, interest rates for 30-year fixed-rate mortgages ranged from 7.29% to 7.73%. Throughout the 1970s and 80s, mortgage rates steadily climbed as unchecked inflation contributed to a volatile national economy. Mortgage rates set by independent lenders are also influenced by the interest rate which the Federal Reserve charges banks for borrowing money. In the early 1980s, high-rate loans emerged as a part of the Federal Reserve's plan to fight inflation. By October 1981, the average rate for 30-year mortgages reached its all-time high of 18.63%.

By the end of the 1980s, yearly inflation returned to a healthy 3.5% and mortgage rates dropped to around 10%. This downward trend continued throughout the 90s, as rates held between 6.49% and 10.67%. Over the past 20 years, rates for 30-year fixed rate mortgages have largely remained in the single digits, peaking at 8.64% in May of 2000.

Today, current mortgage rates remain at historic lows around 4% — with over 63% of homeowners with mortgages paying interest rates between 3% and 4.9%, according to the Census Bureau. As of June 2017, interest rates for new 30-year mortgages were as low as 3.89%. Such low rates are favorable for the consumer because they keep the interest portion of monthly mortgage payments relatively low.

DecadeLowest RateHighest RateRates...
1970s7.23% (1972)12.90% (1979)Rose during "The Great Inflation"
1980s9.03% (1987)18.63% (1981)Fell after historical peak in 1981
1990s6.49% (1998)10.67% (1990)Held relatively flat amidst stable economy
2000s4.71% (2009)8.64% (2000)Fell to low single digits after 2006-2008 crisis
2010s3.31% (2012)5.21% (2010)Holding at historical lows

30-Year vs. 15-Year Fixed-Rate

Average interest rates for 15-year fixed-rate mortgages have followed the same historical trend as 30-year mortgages, with rates for both remaining historically low. However, interest rates on the 30-year loans have always been slightly higher. The increased interest cost comes in exchange for the lower monthly payment allowed by the 30-year's longer repayment schedule. Additionally, 15-year mortgages are less risky for lenders, who'll receive their loaned money back in half the time.

Time series showing historical interest rates for 30-year vs. 15-year fixed-rate mortgages

Homeowners generally prefer the longer 30-year mortgage term because it allows for lower monthly payments and the opportunity to refinance to a shorter term if desired. However, the 30-year mortgage is a substantially more expensive loan because of interest costs, which are amplified by even the slightest rate increase. As of 2015, nearly 70% of homeowners with a mortgage reported that their term length was between 28 and 32 years, while only 11% reported having a mortgage with a term between 13 and 17 years. Below is an example of the cost differential for 15- and 30-year mortgages at 2017 rates.

Term LengthLoanInterest RateTotal InterestTotal Loan CostDifferential
15-Year FRM$250,0003.16%˟$64,236$314,236$73,018 cheaper˟˟
30-Year FRM$250,0003.89%$137,254$387,254
  • ˟Freddie Mac PMMS reported interest rates, June 8, 2017.
  • ˟˟Principal and interest only. Does not include added costs such as mortgage insurance, property tax, closing fees, etc.
Time series showing the historical difference between 30-year and 15-year mortgage rates

Fixed vs. Adjustable Rate

Five-year adjustable rate mortgages, or ARMs, have historically carried lower baseline interest rates than the common 30-year fixed-rate mortgage. Since 2005, rates for the 5/1 hybrid have tracked the decline of the 30-year fixed-rate, with initial rates for the adjustable averaging 0.71 points lower than fixed-rate mortgages.

Time series showing historical interest rates for fixed vs. adjustable rate mortgages, 2005 to 2015

In contrast to the fixed-rate version, which carries the same interest rate for the entirety of the loan, 5/1 hybrid ARM rates vary with the market every year after an initial five year period of fixed rates. Rates for adjustable mortgages are lower during the initial fixed period because the potential for the rate to drastically rise during the variable period poses a significant risk for the consumer. Adjustable rate mortgages are often used by homebuyers who plan to sell their home or refinance before the initial period of fixed rates ends.

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