Mortgage Rates at 7.3%: What to Do Before Oct 28

A small fall after a long climb

Mortgage rates have finally moved in buyers' favour, if only slightly. Freddie Mac's weekly survey put the average 30-year fixed rate at 7.32% in the week ending 22 October 2026, down from 7.40% the week before. It was the first weekly fall since August, after seven straight weekly rises that took rates from 6.65% in late August to their highest since November 2023.

That context matters more than the headline. An 8-basis-point fall does not undo a 75-basis-point climb, and rates are still close to their recent highs. But the direction has changed just days before the Federal Reserve's meeting on 27-28 October, when it announces its next rate decision on Wednesday 28 October. This guide explains what moved, what the Fed can and cannot do to your mortgage, and the practical choices to make this week.

Why rates fell this week

Mortgage rates do not follow the Fed's policy rate directly. They follow the 10-year Treasury yield — the interest the US government pays to borrow for 10 years — plus a margin lenders add for costs and risk. When that yield falls, mortgage rates usually follow. This week it eased to about 5.13%, from about 5.24% the week before, according to Realtor.com Economic Research, and MortgageDaily put the 10-year at 4.96% on 22 October, its first close below 5% since 22 September.

Daily rate measures told a similar story. MortgageDaily's Optimal Blue benchmark put the 30-year fixed at 7.25% in its 22 October observation, the lowest since 25 September, while Bankrate data cited by the Wall Street Journal put the national average at 7.37% on 22 October, down from a 7.50% weekly average the week before. Different surveys use different methods and dates, so small differences are normal — the trend, not any single number, is the signal.

The Fed does not set your mortgage rate. It sets a short-term rate. Your mortgage follows long-term bond yields, which move on what investors expect the Fed to do next.

What the Fed decision on 28 October could change

The Fed's target range is currently 3.75% to 4.00%, after a quarter-point rise on 16 September 2026. Markets now price roughly an 85% chance that the Fed holds rates steady on 28 October, according to CME FedWatch data cited by Realtor.com — a sharp shift from about 42% a month earlier. The bigger market question is December: traders put the odds of a hike at the 8-9 December meeting near 90%.

That is why the words around the decision may matter more than the decision itself. If the Fed holds and sounds calm about inflation, yields could keep cooling and mortgage rates could ease further. If it signals that a December hike is a done deal, or hints at more hikes after that, yields could jump and take mortgage rates back toward 7.40% or beyond. The PCE inflation report on 29 October and Freddie Mac's next weekly survey on 30 October will be the next checkpoints.

History warns against assuming a Fed move equals a mortgage move. In late 2024 the Fed cut rates three times, yet the 30-year mortgage rate rose from 6.09% in mid-September 2024 to 7.04% by mid-January 2025, because investors worried about inflation. In 2026, mortgage rates started rising in the spring, months before the Fed's September hike.

What the numbers mean on a real loan

On a $400,000 30-year fixed loan, principal and interest only, the maths looks like this:

Rate	Monthly payment	Change vs 7.32%
7.00%	$2,661	-$87
7.32% (this week)	$2,748	—
7.40% (October high)	$2,770	+$22
7.60%	$2,824	+$76

A quarter-point swing is roughly $75 to $90 a month on this loan size, or about $1,000 a year. On a $350,000 loan, the week's 8-point fall alone saves $19.07 a month — $2,423.33 at 7.40% versus $2,404.26 at 7.32% — or about $6,866 less interest over 30 years if the rate were held for the full term. That is real money, but not, on its own, a reason to rush a purchase you cannot comfortably afford.

Lock, float, or wait?

Locking means your lender holds your rate for a set period, usually 30, 45 or 60 days, while you close. Floating means you wait, hoping rates fall. The right choice follows your closing date and your budget.

• Lock now if you are under contract and closing within 30 to 60 days, especially if a $50 to $80 monthly rise would strain your budget. Get a fresh quote on Monday before comparing anything, because Thursday's bond move had only partly reached lender rate sheets.
• Consider floating if you are still months away from buying and your budget has room if rates rise. Even then, agree a lock trigger in advance — the rate at which you will lock — rather than trying to time the market tick by tick.
• Check your lock length against the calendar. If your closing date sits close to the 8-9 December Fed meeting, ask about a lock that carries you past it, so a surprise cannot change your rate at the last minute. Ask too about a float-down option, which some lenders offer if rates fall while you are locked.

Other levers worth checking

Loan term. The 15-year fixed rate was 6.68% in Freddie Mac's survey, versus 7.32% for 30 years. On $400,000, a 15-year loan at 6.68% costs about $3,524 a month but about $234,000 in total interest, versus about $589,000 over 30 years at 7.32%. The monthly payment is far higher, so this only works if your budget can carry it.

Adjustable-rate mortgages. The MBA reported a 5/1 ARM rate of 6.46% in the same survey week, versus 7.41% for a 30-year fixed — roughly $250 a month less on $400,000 during the first five years. An ARM can make sense if you plan to move or refinance within a few years, but the rate can rise later, so ask how high it can go and how often it can adjust.

Credit score and refinancing. Among Optimal Blue rate locks with a loan-to-value at or below 80%, the average was 7.17% for scores above 740 versus 7.26% for scores below 680 in the 22 October observation — about $20 a month on a $320,000 loan. Check what tier your quote assumes. For refinancing, most homeowners already hold rates below today's level; if you bought recently near 7.40% or higher, watch for a fall of half a point or more, the usual point where refinancing starts to make sense after closing costs.

A note for UK readers: these are US surveys. UK mortgages usually fix for two or five years rather than 30, and UK rates follow Bank of England expectations and swap rates rather than US Treasuries. The Bank of England held Bank Rate at 3.75% on 17 September, with its next decision on 5 November. The shared lesson holds on both sides of the Atlantic: the central bank's policy rate is not your mortgage rate, and the rate you can actually lock is the only rate that matters for your budget.

Frequently asked questions

Will mortgage rates fall after the Fed meets on 28 October?

Not necessarily. Markets already expect a hold, so a hold alone may change little. What matters is what the Fed signals about December and inflation. A calm statement could help rates ease; a hawkish one could push them back up.

Should I lock my rate before 28 October?

If you are closing within 30 to 45 days and today's payment fits your budget, locking removes the risk of a bad surprise. If you are months away, you have more room to wait, but set your lock trigger in advance and keep in touch with your lender around the decision, the PCE report on 29 October and the next Freddie Mac survey on 30 October.

Is 7.32% a good rate?

It is better than 7.40%, and far above the 6.19% average of last October or the 6.65% of late August. Whether it is good for you depends on your loan size, your other costs — taxes, insurance and any private mortgage insurance — and whether the total payment leaves room for savings and emergencies.

What if rates fall after I lock?

Ask your lender before you lock whether a float-down or renegotiation option exists, what it costs, and what fall triggers it. Without such an option, a locked rate is the rate you close at, even if market rates fall before closing.

The dip is a window, not a new normal. Get pre-approved, know the highest payment you can live with, and talk to your lender about a lock before the Fed speaks — then let the decision, not the headlines, set your next move.