One year of these payments is about $25,374 — almost half of what the average U.S. person earns in a year. Experts say you shouldn’t spend more than 25%-35% of income on housing. Interest rates have stayed in the mid-to-high 6% range. Moving from 7% to 6% would save $270 per month, or $3,240 a year. Yahoo Finance offers a mortgage calculator to compare payments at 6% versus current rates. This helps buyers plan their costs.
Mortgage rate predictions for 2026
Predictions are mixed. The Mortgage Bankers Association (MBA) expects 30-year mortgage rates to stay at 6.4% in 2026. Fannie Mae’s November forecast is more optimistic, predicting rates could slowly drop to 5.9% by the end of 2026. “I would expect mortgage rates to stay in the current range until we see what direction inflation is heading,” said Jennifer Beeston, executive VP of national sales at Rate.
November’s Consumer Price Index (CPI) showed inflation rose 2.7%, lower than expected 3.1%, but data lacks October context due to government shutdown. Conventional mortgage rates likely won’t fall below 6% until late 2026. “In order for conventional mortgage rates to hit below 6%, we need to see a reduction in inflation as well as increased confidence in the continued containment of inflation, which is hard to currently envision given the macroeconomic and geopolitical outlook,” said Beeston, as cited in the report by Yahoo Finance.
Taylor added unemployment would need to rise and global investors must trust U.S. Treasury and mortgage bonds to push rates lower. A possible Fed Chair replacement and long-term effects of Trump-era tariffs make predictions harder. Taylor said, “Sub-6% rates are unlikely until we see the inflation impacts of tariffs. But rates in the 6% to 6.5% range are possible ahead of the Fed leadership switch in May 2026.”
How to get a lower mortgage rate now
Improve your credit score to qualify for lower rates. Make a bigger down payment to reduce your mortgage and earn a lower rate. Use a mortgage rate buydown to temporarily reduce interest for a few years. Buy discount points to lower your interest for the entire loan, paying fees upfront at closing.
Shop around and compare quotes from multiple lenders — could save ~$1,200 per year, as per the report by Yahoo Finance. Consider shorter-term loans or adjustable-rate mortgages for potentially lower rates. If ready to buy, waiting for rates to drop may not be worth it. You can always refinance later to a lower rate.
FAQs
Q1. When will mortgage rates drop to 6%?
Mortgage rates might fall to around 6% by the end of 2026, depending on inflation and Fed actions.
Q2. How much is a 30-year mortgage at 6%?
A $300,000, 30-year mortgage at 6% costs about $1,799 per month for principal and interest.