A $400,000 mortgage costs about $300 more a month than a year ago at a 7.32% rate

A buyer who borrowed $400,000 over 30 years at the rate Freddie Mac reported a year ago would pay about $2,447 a month in principal and interest. At the latest reading of 7.32%, the same loan costs about $2,748, or $300 more (computed), according to Freddie Mac's weekly survey. The illustration uses a round loan size and leaves out taxes and insurance.

What happened

Freddie Mac said the 30-year fixed-rate mortgage "averaged 7.32% as of October 22, 2026, down from last week when it averaged 7.40%. A year ago at this time, the 30-year FRM averaged 6.19%." The difference is 1.13 percentage points (computed). The 15-year rate averaged 6.68%, against 5.44% a year earlier, a gap of 1.24 percentage points (computed).

The rise came in the past two months. Freddie Mac's weekly history shows the 30-year average at 6.65% in the week of August 20, 7.28% on October 1 and 7.40% on both October 8 and October 15. This year's lowest reading was 5.98% in the week of February 26, so the October 22 rate is 1.34 percentage points above it (computed).

What the rate change does to a payment

The monthly principal-and-interest payment on a fixed loan follows from the loan size, the rate and the term. For a $400,000 loan over 30 years, a script gives these figures (computed from the Freddie Mac rates above):

• At 5.98%, the February low: about $2,393 a month.
• At 6.19%, a year ago: about $2,447.
• At 6.65%, the August 20 reading: about $2,568.
• At 7.32%, the latest reading: about $2,748.

The latest payment is 12.3% above the year-ago payment on the same loan, 7.0% above the August level and 14.8% above the February low (computed). Over twelve months the difference from a year ago comes to about $3,600 (computed).

The same arithmetic can be run the other way. A buyer who wants to keep the year-ago payment of about $2,447 at 7.32% can borrow about $356,300, which is 10.9% less than $400,000 (computed). The calculation says nothing about what any household can afford; it shows only how much of a given payment the rate absorbs.

Why it matters

The payment arithmetic helps explain statements that housing-market sources made in the same weeks. The National Association of Realtors reported that "existing-home sales increased by 1.5% in September 2026." Its chief economist, Lawrence Yun, said that "August and September marked the two slowest months for home sales this year" and that "further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home." NAR also said that inventory rose to 1.60 million homes and that prices were up 1.3%, according to its existing-home sales page.

The Mortgage Bankers Association reported that its unadjusted Purchase Index "was 18% lower than the same week one year ago," according to the MBA's weekly survey. Joel Kan, the MBA's deputy chief economist, said that "most homeowners still have rates much lower than prevailing market rates" and that "many homebuyers have put their purchase plans on hold." FinanceInTime covered the survey when it was released.

Prices have not absorbed the change

A higher rate raises the cost of a given loan regardless of the price of the house. The price data does not show whether sellers are absorbing any of the difference. The Federal Housing Finance Agency said that "house prices rose 2.4 percent from August 2025 to August 2026," according to its house price index release. Over the same period the payment on a fixed $400,000 loan at the survey rate rose 12.3% (computed). The two figures measure different things and are not directly comparable. FinanceInTime's report on Case-Shiller data looks at which cities moved against inflation.

Builders and construction

The Census Bureau reported that "privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,221,000," which it said was 5.2 percent below the revised August estimate, according to its new residential construction release. PulteGroup's chief executive, Ryan Marshall, said in the company's third-quarter earnings release that "the rapid increase in interest rates has stretched affordability even further, made selling an existing home even harder, and has pushed even more consumers to the sidelines." FinanceInTime's earlier report on builders and mortgage rates covers the orders side.

The sources agree on direction: rates up, applications down and sales near this year's lows. They do not show how much of the decline in activity comes from the payment itself and how much from other pressures such as inflation or sentiment, and this article does not attempt that split. The data does not show why individual buyers have waited.

Why the number matters beyond the payment

A mortgage rate is set when a loan is locked, and the monthly payment on a fixed loan then stays unchanged. That is why the MBA's remark about homeowners matters: households with older, lower rates have a payment that does not follow the market, while a buyer who needs a new loan faces the current rate. The difference between the two payments, shown above for a round loan, is one way to see the distance between those two groups. It is a calculation, not a measurement of what any household pays.

The 15-year loan shows the same shape. Its rate is 1.24 percentage points above a year ago, slightly more than the 1.13 points on the 30-year loan (computed).

What to watch

NAR's October existing-home sales release is scheduled for November 12, according to its existing-home sales page. The 30-year average has stayed at or above 7.28% for four weeks (computed from Freddie Mac's series), so whether the October 22 decline continues will show up in the next weekly readings. If rates ease further, the payment on the same $400,000 loan would fall by about $27 a month for each 0.1 percentage point (computed), a figure that depends on the loan size and term.