Mortgage interest rates are sharply higher this morning as the prospects for peace in Iran don’t look great. Over the weekend, the U.S. launched its first attacks in weeks, and Iran retaliated. While Iran’s leader has indicated he’s open to returning to the terms set forth in June’s memorandum of understanding, President Trump is sounding a bit more bellicose. (If that word’s unfamiliar, its root is bellum, which is latin for war.)
Today, the average interest rate on a 30-year, fixed-rate mortgage jumped to 6.78% APR, according to rates provided to NerdWallet by Zillow. This is 16 basis points higher than yesterday and 22 basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
The renewed fighting has, as it always does, reignited fears of rising oil prices and intensifying inflation, so bond yields are moving higher. Mortgage interest rates are generally benchmarked to the yield on the 10-year Treasury note, so they go where it goes — and the yield just went to its highest point since January 2025.
But rates were already moving higher before this latest round of overseas hostilities. For more on why, keep reading below the chart.
Average mortgage rates, last 30 days
🤓 Kate on Rates: August 27, 2026
📈 What influences mortgage rates?
Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.
The situation in Iran isn’t helping mortgage rates, but like I mentioned above, rates were already headed higher before this weekend’s flareup. On Friday, Federal Reserve Chair Kevin Warsh gave his first official speech in that position at the Kansas City Fed’s annual gathering in Jackson Hole, Wyoming. Traditionally this offers the Fed chair a pulpit to lay out a vision for the central bank and to clue in markets as to the Fed’s likely moves. Given Warsh’s extreme reticence, there were a lot of eyes (and ears) on this speech — was he finally going to offer some insight into his views on the present economy or any kind of indication as to what might spur the Fed to action?
So on the plus, yes, Warsh did go over the present economic situation in a good amount of detail. He feels like things aren’t too bad, though he noted the housing market as a weak point.
Inflation’s the one element Warsh described as truly problematic, a point he underscored repeatedly. Near the end of his speech, he said, “There is one signal nobody can miss: The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank. And that is where it belongs.”
For me, this sounded a lot like the tough talk on inflation we got at Warsh’s two post-meeting press conferences, each of which followed meetings where the Federal Open Market Committee chose not to raise the federal funds rate. (Again, hiking that short-term borrowing rate is their key tool for taming inflation.) We already know Warsh is committed to a 2% rate of inflation and that he thinks this is the Fed’s responsibility.
But markets seem to think this time is going to be different, so Fed futures traders’ odds of a rate hike at the Sept. 15-16 meeting have shot upward since Friday morning’s speech.
Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).
With rates where they are right now, you could start considering a refi if your current rate is around 7.28% or higher.
Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinancethan you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.
If you’re looking for a lower rate, use NerdWallet’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.
🏡 Should I start shopping for a home?
There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.
If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.
NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.
🔒 Should I lock my rate?
If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.
Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.
🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.
🧐 Why is the rate I saw online different from the quote I got?
The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.
In addition to market factors outside of your control, your customized quote depends on your:
Even two people with similar credit scores might get different rates, depending on their overall financial profiles.
👀 If I apply now, can I get the rate I saw today?
Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.
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