What it costs to borrow, and how to read it — a short explainer, then today’s rates against their own history.
Narrated · 3:24
Deciding when it's the right time to finance a big purchase — a home, a car, a loan for your business — isn't easy. Nobody knows where rates are headed next. But there are steps you can take to make a more informed decision. In the Yields videos, we covered the yield curve and the forces that move it. This is the next step: turning what you know about the curve into three questions that lead to a smarter borrowing decision. We'll use a mortgage as the example — but the questions fit any big loan.
Question one: where do today's rates sit, in context? A mortgage in the mid-single digits can feel expensive — until you see fifty years of it. Rates touched nearly nineteen percent in 1981, and fell below three percent in 2021. That under-three era felt normal to a whole generation, but it was the anomaly — the cheapest money in half a century. And anchoring to the nineteen-percent era misleads you just as badly the other way. Neither extreme is the baseline. A rate only means something next to its own history and the economy it's sitting in.
Question two: how are lenders pricing risk? Here's the part that surprises people — you can actually compare that markup against its own history. Remember from the Yields video: your mortgage rate is the ten-year Treasury, plus a markup the lender adds on top — set by them, not the Fed. And that markup has a life of its own. Historically it's averaged a little under two points, and usually sits between about one-and-a-half and two-and-a-half — though in real stress it's spiked above three. A wider markup means lenders see more uncertainty; a narrower one, more confidence. It's a read on how risky lenders think conditions are — so seeing where it sits today adds real context to your decision.
Question three: what's moving rates? This is the one people get backwards. 'Should I wait?' usually means 'will rates drop?' — and nobody can answer that. You can't predict the moves. But you can read the forces behind them: inflation, the job market, the shape of the yield curve — and the lender's markup you just saw is one of them, too. Every one of these is something we track for you — the jobs and inflation reads, the curve, the markup history. They won't tell you the future. But together, they're the clues that help you make an informed decision.
And once you've asked those three, one more thing: the true cost. Lenders quote you a monthly payment. But the number that decides everything is the interest you'll pay over the life of the loan. On a four-hundred-thousand-dollar mortgage, one extra point is about two hundred sixty dollars a month. Feels small. Over thirty years, it's nearly ninety-five thousand dollars. The monthly payment hides it. The lifetime number doesn't.
So — three questions, plus the real price tag. Where does the rate sit, in context? How are lenders pricing risk? And what's moving rates? We can't tell you whether to borrow — that's for you to decide. What we can do is help you walk in with the full picture. Today's readings are right below. That's the cost of borrowing.
Borrowing costs don’t all come from the same place, and they don’t move together. The Federal Reserve sets one rate — the federal funds rate, what banks charge each other overnight — and that flows directly into the prime rate, the benchmark behind credit cards and most variable-rate loans. But a mortgage doesn’t follow the Fed. It follows the 10-year Treasury, a rate the bond market sets on its view of the years ahead — so the Fed can cut while mortgage rates barely move. Over the past year that’s exactly what played out: the Fed’s cuts pulled prime down 0.75 point, while 30-year mortgage rates eased just 0.37 point.
This page tracks both forces: where today’s mortgage and prime rates sit against their own history, the markup lenders add on top of the bond market, and how tight credit is overall — so you can tell whether today is an ordinary moment to borrow or an unusual one.
| Rate | Now | 1-yr | Where it sits |
| 30-yr fixed mortgage | 6.48% | −0.37 | 85th pctile of 20 yrs · 3-yr range 6.0–7.8% · 50-yr avg 7.7% · tracks the 10-yr Treasury · updated weekly as of Jun 4, 2026 |
| 15-yr fixed mortgage | 5.79% | −0.20 | 80th pctile of 20 yrs · 3-yr range 5.2–7.0% · 50-yr avg 5.3% · updated weekly as of Jun 4, 2026 |
| Bank prime rate | 6.75% | −0.75 | 76th pctile of 20 yrs · 3-yr range 6.8–8.5% · 50-yr avg 7.2% · moves 1:1 with the Fed as of Jun 3, 2026 |
A mortgage rate is really the 10-year Treasury plus a markup the lender adds to cover risk and costs — the part of your rate the Fed doesn’t control. Right now that markup is 2.0 points, the 69th percentile of the past 20 years, against a long-run average near 1.8% (the dashed line). Above that line, mortgages are pricier than normal relative to the bond market; below it, a relative bargain. Over the last three years the markup ranged 1.8–3.2 points. One caveat: “normal” drifts with the mortgage market — the Fed’s bond-buying compressed the markup through the 2010s, and winding it down since 2022 pushed it wider — so the average is a guide, not a law.
Beyond the price of each loan, the Chicago Fed’s credit-conditions index sits at -0.02 — credit is currently right around average (zero is the long-run norm; positive means tighter, negative looser). It’s a read on how freely lenders are extending credit, not a rate you pay.
Source: Freddie Mac (Primary Mortgage Market Survey), the Federal Reserve (H.15 selected interest rates), the U.S. Treasury, and the Federal Reserve Bank of Chicago — all via FRED. Mortgage rates update weekly; the prime rate and 10-year Treasury update as they move. Rates shown are national averages, not quotes — what you are offered depends on your credit, term, and lender.