Hello and welcome to this month’s Inside Track. For the 10 to 12 of you that will actually watch this video, thank you so much. I really do appreciate you. It’s October, and for grins and giggles, I decided to do a little history for you and share a little bit of information on where interest rates have been, not for the short term, but for the long term. Actually, both. Let’s jump in. Every week, Freddie Mac does their primary mortgage market survey, and it comes out every Thursday, and it goes back to 1971. Each week they release where interest rates were for the previous week. I went back to exactly a year ago, October 9th of 2025.
As you recall, or maybe you don’t, interest rates a year ago, we were at 6.3% on the 30 and 5.53 on the 15-year. Now, one year later, we went from 6.3, 5.53. Where did we go? Boom. We’re at 7.4 on the 30 and 6.73 on the 15. That increase from 7.4 this week to 6.3 last year and 6.73 to 5.53, that’s a 1.1% increase for the 30-year and a 1.2% increase for the 15-year. On a $500,000 loan, that translates to an increased monthly payment year over year. Same amount of money costs you $367 more per year on a 30-year, $326 more per month on a 15-year. That ended up being a 12% increase on a 30-year and an 8% increase in the monthly payments, respectively, on these two terms, which is crazy. To use a technical lending term with you, that pretty much just sucks.
Moving on. I thought, let’s look at what’s the all-time high and all-time low ever for mortgage interest rates since we’ve been tracking this stuff. We got to go back 45 years for the high. Let’s look at that. Exactly the same time 45 years ago, on October 9th of 1981, interest rates peaked at 18.63%. Can you imagine buying a home in October of ’81? Here’s your 18.63% interest rate. Good luck. That was kind of a mind bender.
And then on the low side, we got to go back about six years in the depths of COVID. January, the beginning of 2021, we hit a low of 2.65% on a 30-year and a 2.16% on a 15-year. We know some people still have these, and they’re certainly crying the blues, but inflation runs at 2.5% to 3%. This is free money, and you can’t do that. We knew it was temporary. It was COVID, right?
I threw this chart in from Fred, the Federal Reserve economic development chart. This is where you can go grab these charts. Super nerdy, but here’s the going back to exactly 15 years, back to, I think I sent this back to ’71, to look at the average. These gray areas are when we had recessions. Right here was the big housing crash in 2009, 2008, 2009. And then we rode this wave of, remember what the Fed called this? They said it was transitory. Transitory means temporary. We had a decade of transitory interest rates when things were pretty much around 5% or lower. And then boom, coming out of this on Memorial Day of 2020, when the Feds had to raise interest rates, and they just went boom, straight up. And this is where we’ve been since then over these last four years or so. This is kind of where we are now.
I just asked Google one last question. Average it out for me. Let’s look at what they said. I said, using this data from the last 50 or so years, what’s been the average? Turns out, going back to ’71, the average interest rate on a 30-year loan is at 7.7%. We had a high of 18.63, which is nuts, exactly 45 years ago. The low during COVID of 2.65 about six years ago. And as of this last week, we’re at about 7.4. We’re running slightly below average. Anyway, that’s what the numbers are.
Crazy as it is, I just thought I’d share that. I’d love to know your thoughts on this as well. If you made it this far, as always, thanks for watching. I’m here for you. If you have any questions or you need help with any of this stuff, please reach out. We’ll talk to you soon. Take care.
