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Home-Loan Rates Plunge To 2.8%—Another Historic Record Low

Borrowing money to fund the purchase or refinance of a home this autumn may never again be this affordable, experts say.

On October 22nd, home-loan interest rates plummeted to a new historic record low of 2.8% nationwide for 30-year fixed-rate loans—the lowest ever recorded by the Freddie Mac’s Primary Mortgage Market Survey, which dates back to 1971.

“Mortgage rates today are on average more than one full percentage point lower than rates over the last five years,” noted Sam Khater, Freddie Mac’s Chief Economist.

“This means that most low- and moderate-income borrowers who purchased during the last few years stand to benefit by exploring refinancing to lower their monthly payment,” Khater said.

The interest-rate low also means Chicago home buyers now may have a once-in-a-lifetime opportunity to lock in the lowest mortgage interest in 50 years, assuming they have a good job, down-payment cash and a solid credit score.

Average benchmark 30-year fixed-rate mortgages fell to 2.8% for the week ending October 22nd, down from 2.81% a week earlier. A year ago, the 30-year fixed-rate loan average was 3.75%.

Fifteen-year fixed loans averaged 2.33% on October 22nd, down from 2.35% a week earlier. A year ago, 15-year fixed loans averaged 3.18%.

The comprehensive Freddie Mac survey focuses on conventional, conforming, fully-amortizing home-purchase loans for borrowers who place down payments of 20% and have excellent credit.

On October 23rd, Mutual of Omaha Mortgage was quoting a rock bottom 2.843% on 30-year fixed rate loans, and 2.625% on 15-year fixed rate loans, reported

Under an aggressive loan program involving pledged money-market funds, Huntington Bank, was quoting 2.2% on a seven-year jumbo adjustable-rate mortgage (ARM) with 25% down payment, according to mortgage broker Brian Bockholdt.

Before 2020’s sharp dip in interest charges, mortgage rates last reached a historical rock bottom on November 21, 2012, when the 30-year fixed mortgage average hit 3.31%, according to Freddie Mac’s archives.

Then came 2020—the year of the Covid-19 pandemic. On July 16, 2020 home-loan interest rates nationwide skidded to 2.98%—what was then a historic record low. It was the first time in 50 years that home-loan rates fell below 3%, reported Freddie Mac.

Since then, rates have held below 3% for benchmark 30-year-fixed home loans. On August 27, 2020, the rate averaged 2.91%, down from 2.99% a week earlier.

To support the economy during the pandemic, the Federal Reserve said it plans to keep interest rates near zero even if inflation exceeds its 2% level.

What this means is borrowing rates for home mortgages, auto loans, and business loans likely will remain ultra-low for years to come.

Mortgage-rate history

Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5% on five-year balloon loans.

Five decades ago, between 1963 and 1965 you could get a mortgage at 5.81% to 5.94%. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6%-to-9% range.

In the early 1980s, run-away inflation caused home-loan rates to skyrocket over the moon. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45% in October of 1981 during that Great Recession.

Rates finally fell below 10% in April of 1986, and then bounced in the 9%-to-10% range during the balance of the 1980s. Twenty-one years ago—in August of 1999—when many of today’s Millennial borrowers were in grammar school, lenders were quoting 8.15% on a 30-year fixed mortgage. Back then, that seemed like a good deal.

However, interest rates began falling gradually over the last decade, sliding to 3.31% on a 30-year fixed mortgage in November of 2012.

Then came 2020, which likely will go down in the American housing history book as the “Year of Rock Bottom Rates.”

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit


“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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