The average rate on a 30-year fixed mortgage reached 7.49 percent in the week ending October 2, according to the Mortgage Bankers Association’s weekly survey, up from 7.30 percent a week earlier. Joel Kan, the association’s deputy chief economist, said rates moved to their highest level in almost three years. Over the same week, applications to buy or refinance a home fell 4.2 percent after seasonal adjustment. The survey shows buyers backing away while lenders charge more in points on top of the higher rate.
Every loan type got more expensive
The 7.49 percent figure covers conforming loans, those up to $832,750, with a 20 percent down payment. Points rose too, to 0.84 from 0.75, which means the borrower pays 0.84 percent of the loan up front on top of the rate. Jumbo loans above $832,750 averaged 7.39 percent, up from 7.27 percent. FHA-backed loans averaged 7.14 percent, up from 6.97 percent, with points at 1.36 compared with 1.18 the week before. The 15-year fixed rate climbed to 6.71 percent from 6.56 percent.
Two weekly averages are now in circulation, and the 0.21-point gap between them is not an error. Freddie Mac’s survey put the 30-year rate at 7.28 percent as of October 1, up from 7.03 percent the week before and 6.34 percent a year earlier. The MBA’s 7.49 percent comes from a different survey and counts only loans with a 20 percent down payment, with points shown separately. Both measures rose in a single week, by 0.19 points for the MBA and 0.25 points for Freddie Mac, and that jump is the part that reaches a real quote.
Freddie Mac posts a new 30-year rate every Thursday at noon Eastern, and the MBA adds its application count each week, so the next reading on this climb is never more than days away.
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FHA buyers stepped back first
Purchase applications dropped 2 percent on a seasonally adjusted basis and sat 15 percent below the same week a year ago, the MBA reported. Kan said purchase activity decreased across all loan types, with FHA purchase applications falling the most, down 6 percent. FHA loans accounted for 16.4 percent of all applications, down from 16.7 percent, while VA loans held at 11.8 percent, down from 11.9 percent.
Kan tied the retreat to cost. The jump in borrowing costs, he said, has caused many potential borrowers to step back from the purchase market, and he pointed to affordability challenges as the drag. Refinancing is not filling the gap. Refinance applications fell 8 percent in the week, and their share of all applications slipped to 37.0 percent from 38.3 percent. Kan said very few homeowners have an incentive to refinance at these rates.
The market composite index, the MBA’s broadest gauge of application volume, fell 4.2 percent after seasonal adjustment and 4 percent before it. Kan described 7.49 percent as the highest in almost three years. The release does not give an exact month for the last time the survey recorded a rate that high, so the comparison rests on his wording.
Adjustable rates draw a larger share
One response to the higher fixed rate is the adjustable-rate mortgage. Kan noted that a higher share of borrowers are choosing ARMs to lower their initial payments. ARMs made up 10.3 percent of applications for the week, unchanged from the week before. The 5/1 ARM, which holds its rate for five years before it can change, averaged 6.43 percent, down from 6.47 percent even as fixed rates rose. That left it 1.06 points below the 30-year fixed average.
The cheaper rate came with a bigger up-front charge. Points on the 5/1 ARM rose to 1.69 from 1.20. The Consumer Financial Protection Bureau explains that one point equals 1 percent of the loan amount, or $1,000 on a $100,000 loan, and that a loan with a point should carry a lower rate than one with none from the same lender. By that measure, the points on the conforming 30-year fixed (0.84) and the FHA loan (1.36) also moved up in step with their rates, so the up-front bill grew along with the monthly one.
Comparing offers on a Loan Estimate
The CFPB tells shoppers to compare Loan Estimates from several lenders to get the best deal, and it treats the interest rate as only one part of total cost. Its rate tool shows offers as ranges, such as loans running from 5.875 percent to 8.125 percent in its sample scenario. That tool draws on data from April 1, 2025, so the weekly survey averages above are the better guide to where quotes stand now.
A rate that looks lower than the survey average deserves a look at the points beside it. The ARM numbers show the trade in plain figures: a rate 1.06 points under the fixed average, paid for with 1.69 points up front. The same question applies to a fixed-rate quote that comes in under 7.49 percent.
The MBA’s numbers show borrowing costs rising on every loan type it tracks while fewer people apply. Kan’s explanation is that the jump in rates has pushed many would-be buyers out of the market, and the refinance share is falling alongside purchases. Next week’s survey will show whether applications keep sliding or whether 7.49 percent turns out to be a peak.
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This article was produced with AI assistance and reviewed by The Money Overview’s editorial team.
