US Mortgage Rate Forecast 2027: What Every Forecaster Says, and What I'm Planning For

The 30-year fixed hit 7.40% on October 8, 2026, and most of the published forecasts still have it at 6.7% to 6.9% through 2027. My own prediction is 7% to 7.75% for most of next year, and below I set out every forecast side by side, why I think the September numbers are too low, and the one lever foreign investors like me and my clients actually control.

I've bought more than 120 US rentals as a foreign national since 2016, and I've financed most of them while the forecasts were telling me rates were about to fall. This page has tracked those forecasts since June 2025. Until this update I refused to make a prediction of my own. Now I am, with the reasoning and the case against it.

The forecasts here belong to the institutions that published them, and each one is dated. The prediction is mine. Neither is advice, and the way to use both is the same: buy the house that works at the rate in front of you.

Where are mortgage rates right now?

Higher than at any point this year. In the week of October 8, 2026, Freddie Mac's weekly survey put the 30-year fixed at 7.40%, up from 7.28% the week before and 6.30% a year earlier. The 15-year was 6.73%. The 2026 low was 5.98% on February 26, so the 30-year has risen 1.42 points in seven months.

That survey measures one kind of borrower: a conventional purchase loan with 20% down and excellent credit. It's the national benchmark, and it's the number every forecast below is trying to predict. It isn't what a foreign national pays, which is the last section of this page.

The Federal Reserve raised its benchmark rate by a quarter point on September 16, to a range of 3.75% to 4%. It was the Fed's first increase since July 2023. In its September projections, the committee's median puts the rate at 4.1% at the end of 2026 and 4.1% again at the end of 2027. That's a projection, not a promise. But read the 2027 figure twice. The Fed's own central case for next year contains no cuts at all.

The Fed doesn't set mortgage rates. A 30-year mortgage is priced off the 10-year Treasury yield, plus a margin lenders and investors need on top. That margin is called the spread. On October 8 the 10-year closed at 5.22%, according to the Fed's H.15 release of October 9. The mortgage averaged 7.40%. So the spread was 2.18 points. That's much narrower than it's been previously, and we should be thankful for that.

Keep that number in mind, because it's the most useful tool on this page. If you know the spread and you have a view on the 10-year, you have a view on mortgage rates. The spread was about 1.97 points on September 2, above 3 points at times in 2022 and 2023, and below 1.5 points when the Fed was buying mortgage bonds. Around 2 points has been normal for a year.

My own DSCR lender uses the 5-year Treasury as one of its pricing benchmarks, not the conventional average. It was 4.99% on October 8. Other lenders price differently. I track investor loan pricing daily on my DSCR loan rates page, and the extra a non-resident pays is on the foreign national mortgage rates page.

What do the forecasters expect for 2026 and 2027?

Mostly 6.7% to 6.9%, from forecasts written before the market moved. The one forecast published since rates passed 7% has moved above 7% with it. I expect the rest to follow in due course as they republish updated forecasts.

Here's every dated forecast I could find, newest first, with the 10-year Treasury yield each one assumes where it says.

Three things here stand out to me.

First, the September forecasts are already below the market. Fannie Mae's 6.8% for the fourth quarter sits 60 basis points under the October 8 reading, with about eleven weeks of the quarter left. A basis point is a hundredth of a percentage point, so 60 basis points is 0.6%. Fannie Mae, the MBA and Wells Fargo all published in mid-September, before rates went through 7%.

Second, the forecast that has been redone since then agrees with the market. The MBA's October baseline, presented at its annual convention on October 11, has the 30-year above 7% through 2027 and the 10-year near 5%. Its chief economist, Mike Fratantoni, put it plainly at the convention: "The unfortunate news is, I don't think we're going to come down that far."

Third, the gaps are part of the evidence. NAR hasn't published a rate forecast since June, and its June figure was for 2026 only. I couldn't find a dated 2027 mortgage rate forecast from Zillow or Redfin. Freddie Mac stopped publishing forecasts in early 2025. So when you read that "experts expect rates to ease", check the date on the expert.

What about 2028?

Nobody I could find has published a 30-year mortgage forecast for 2028. Not Fannie Mae, not the MBA, not Wells Fargo.

Two figures go that far, and neither is a mortgage rate. The Fed's median projection has its policy rate at 3.9% at the end of 2028. The MBA's September forecast had the 10-year at 4.7% at the start of 2028, which its own October baseline has since moved up. The MBA's spring edition had 2028 mortgages at about 6.5%, but that came before the year's oil, inflation and bond moves, and I wouldn't carry it forward.

So 2028 is a guess, mine included. A forecast tells you what's plausible. It doesn't tell you whether a deal works.

How far have the forecasts moved this year?

A long way, and all of it upward. Here's what each edition said about 2026, against where the market actually is.

Fannie Mae said 5.9% in September 2025. Thirteen months later the market is 1.5 points higher than that. Last December, both forecasters had 2026 averaging somewhere between 6.0% and 6.4%.

I'm not criticizing them. I made a similar call at the start of this year and I was wrong for the same reasons. A forecast is a snapshot of the assumptions on the day it's written, and this year those assumptions changed almost every month.

What does a forecast miss cost on one house? On a $140,000 loan (typical for a US Midwest rental property), the gap between June's 6.4% and September's 6.8% is about $37 a month in principal and interest: $875.71 against $912.70. That's roughly $440 a year. The gap between September's 6.8% and October's 7.40% is about $57 a month on the same loan. Small numbers on one house, but they're the numbers your cash flow is built from.

Why do the forecasts keep changing?

Because their inputs keep changing, and the biggest input has moved more than anyone expected.

Early-2026 forecasts assumed inflation would keep cooling and the Fed would keep cutting. On February 28, the US and Israel struck Iran. Oil jumped, inflation worries grew, and mortgage rates started rising within days.

Since then, these are the drivers I watch:

• Inflation. The Consumer Price Index rose 0.4% in August and 3.4% over the year, against the Fed's 2% target. Higher expected inflation pushes bond yields up, and mortgages with them.
• The Fed. It cut in late 2025, held for the first eight months of 2026, then raised in September. The MBA's chief economist said in September the association expects two more Fed increases over the next year.
• The 10-year Treasury. It was 3.97% just before the strike, on February 27. It was 5.01% the day the Fed raised rates, and 5.22% on October 8. That's a rise of 1.25 points.
• Government borrowing. The MBA has cited investor worry about the federal deficit as one reason long yields rose.
• Growth. The economy has held up, which leaves the Fed less room to look past inflation.

Look at the size of each move. The Fed moved once, by a quarter point. The 10-year moved by a point and a quarter. One reading of that gap is that the bond market wants more to lend to the US government for ten years than it did in February, for reasons that go beyond what the Fed does next. I can't prove that's the reason, and nor can anyone else. But it matters, because a forecast of 6.7% is really a forecast that the 10-year falls back toward 4.7% to 4.8%.

Here's the math. If the spread holds near 2 points, a 6.8% mortgage needs a 10-year of about 4.8%. On October 8 it was 5.22%. Fannie Mae's September forecast assumes 4.8% to 4.9% through 2027, and a spread that narrows a little too. The MBA's September forecast assumed 4.7% to 4.8%. The MBA's October baseline has given that up and assumes about 5%.

What do I think happens in 2027?

My prediction: the 30-year fixed spends most of 2027 between 7% and 7.75%, and a reading below 6.5% needs a recession to produce it. If I'm wrong, I expect to be wrong on the high side, which is the way this year's forecasts were wrong.

I've been buying US rentals through two rate cycles, and I've been wrong about rates before, this year included. So weight this accordingly. Here's what it rests on.

The spread. 7.40 minus 5.22 is 2.18 points. For 6.7% to be right, the 10-year has to fall about half a point and stay there, with the spread holding near 2 points. I don't see what does that while the Fed is still raising rates.

The Fed. Its median projection has 4.1% at the end of 2027, the same as the end of 2026, with inflation at 3.4%. A central bank that expects no cuts for about fifteen months isn't going to pull the 10-year down on its own.

The record. Last December the two main forecasts had 2026 averaging 6.0% and 6.4%. In October the market is at 7.40%. Every edition this year moved up, and the one forecaster that has updated since rates passed 7% now agrees with the top half of my range, not the bottom.

The case against me. Fannie Mae and Wells Fargo aren't fringe. They have teams of economists, and their 6.7% to 6.9% assumes a 10-year near 4.8%, which is where it was in early September. Forecasters do eventually get a turn right. And a sharp rise in unemployment would bring long yields and mortgage rates down quickly, probably faster than any forecast now shows.

If that happens, what happens to a property you bought on my numbers? It still works. It works better, because you can refinance (pending prepayment penalties). That's why I'm comfortable publishing a prediction that might be wrong. The advice below doesn't depend on it being right.

I used to end this page by saying nobody knows where rates will be in a year. That's still true. The difference is that I'm now telling you my guess, why I hold it, and how I'd be wrong.

What should you plan around instead?

Today's rate. Waiting for lower rates is a reasonable instinct, and this year shows the risk in it. A buyer who waited for September 2025's 5.9% is now looking at 7.40%.

Here's what I do, in order:

1. Run the numbers at today's rate. If a deal only works at a lower future rate, it doesn't work today. My free DSCR loan calculator does this in a minute.
2. Treat a future refinance as upside. Most DSCR loans carry a prepayment penalty, a fee for paying the loan off early that steps down to zero over about five years. That's why refinancing early can cost you more than the rate saves.
3. If you expect rates to fall, look at the structure. An adjustable rate can suit some buyers, and I've set out when an ARM beats a fixed rate with the numbers.
4. Improve what you control. Some DSCR lenders price better at a stronger coverage ratio or a lower loan to value. These are the four levers I use to get a better quote.
5. Negotiate the rate, not just the price. This one now gets its own section below, because in today's market it's worth more than the other four.

One of my clients, Ronald, bought two Kansas City rentals from Ottawa. His case study shows how the purchases worked. Neither was timed to the rate market. Both were bought because the numbers worked on the day he bought them.

How do you get a 2027 rate the forecast can't give you?

You have the seller buy it for you. A seller credit can pay for discount points, which are fees paid at closing to lower the rate for the life of the loan. In a market where sellers are paying, that's where I want the credit to go.

Sellers are paying right now. Redfin found sellers gave a concession in 44.7% of US home sales in August, the highest August share since at least 2020. It estimated 57.9% more sellers than buyers in August, the biggest gap in records going back to 2013. Kansas City was a buyer's market on that measure, at 16.1% more sellers than buyers, and Cleveland was balanced at 8.5%. And 21.1% of listings had a price cut in the four weeks to September 20.

The sellers I buy from are mostly renovators on short-term money with a repayment date. They'd rather give a credit than carry the loan into next year. Not every discount is worth taking, and I've written up who is actually discounting while rates are high, and which discounts I walk away from. I hold every document on two of those purchases, from what the renovator paid to what the buyer paid. I should be plain about one thing: I advise on some of these sales and I earn a fee from the seller. Weigh what follows with that in mind.

Here's one house, priced two ways. It's a renovated Kansas City rental, appraised at $199,000 in August, with a tenant paying $1,850 a month. The buyer is a foreign national with no US credit, at 70% loan to value. Both columns are real lender quotes from October 2026, 30-year fixed.

The negotiated column pays $206.61 a month less. Where does that come from? The smaller loan explains about $97 of it: $139,300 at 8.5% costs $1,071.10, and $126,725 at 8.5% costs $974.41. The lower rate explains the other $110: $126,725 at 7.25% costs $864.49. So the price cut is mostly equity, and the rate is mostly cash flow. That's why I'd rather the seller paid for the rate than knocked the same money off the price.

There's a catch, and it caught this deal. Lenders cap how much seller credit can go toward closing costs and points, and the cap varies by program. Here the $10,000 was more than the program allowed, so the extra $2,775 was applied to reduce the loan instead. That's why the loan is $126,725 rather than 70% of $185,000. Before you negotiate a credit, get the lender to tell you the cap in writing. And know what the credit is actually covering before any of it reaches points.

One more thing to be clear about. That's one house and one buyer, not a market. The 7.25% was below Freddie Mac's October 8 average of 7.40% for an American with excellent credit. That isn't because foreign nationals get better rates. It's because the seller paid for the rate, and the seller paid because he had to sell.

Now put it against my prediction. If I'm right and the market spends 2027 near 7.5%, a 7.25% rate bought with somebody else's money is a rate you keep. If I'm wrong and rates fall, you can look at refinancing once the prepayment penalty allows, and the discount on the price is still yours. Either way, the credit was the right move. A seller credit can also cut the cash you need at closing, and on this house it did both.

To price a quarter point on your own loan, here's the ladder on $130,000:

About $22 a month, every month, for 30 years. Run your own house through my free rental property cash flow calculator at each step and see where it stops working.

What does this mean for foreign national and DSCR rates?

The foreign national premium has shrunk from three points to between half a point and a point and a half, and in my experience it isn't going to widen again in 2027. A buydown can close the rest.

When I took my first US loan as a foreign national in 2016, I paid about 7% while US rates were about 4%. I've written about that 2016 rate before. Three points.

Foreign national DSCR loans still price above the Freddie Mac average. They're a different, non-agency product, often for borrowers with no US credit, qualified mainly on the property's rent. They move with the market, but not point for point.

Here's what one direct lender quoted the same foreign national profile, with no US credit at 70% loan to value, on two different Kansas City houses. The June house was $195,000 and the September house $185,000. The June quote is the one I compared line by line against a broker's.

So in September this lender sat between about 0.1 and 0.85 points over the national average, depending on how much you paid in points. At 75% loan to value the same lender's September quotes ran from 7.49% to 8.49%.

That's the second half of my prediction. Foreign national rates will keep tracking US rates in 2027, at about 0.5 to 1.5 points above the Freddie Mac average. The specialist lenders that closed the gap didn't exist a decade ago. They do now, they compete with each other, and the loan qualifies on the house rather than the borrower.

And that gap is the part you can close. Paying discount points, or getting the seller to pay them, can take a foreign national to parity with the US average. In September this lender's lowest-rate option was 7.125%, within a tenth of a point of the 7.03% average that week. The Kansas City house above went a little further, to 7.25% against a 7.40% average, because the seller paid. Parity isn't free. Somebody pays for the points, and the lender caps how much of that can come from the seller.

I'd rate that evidence honestly. It's one lender's quotes and my own deals, not a survey of the market, and the foreign national mortgage guide and foreign national DSCR loan guide cover how other lenders qualify borrowers. If you're weighing the options, DSCR, foreign national and ITIN loans are compared side by side. And higher rates mean more cash at closing, so it's worth knowing how much cash a foreign national DSCR loan really needs before you commit.

Foreign buying has fallen too. Foreign buyers bought 14% fewer US homes in NAR's 2026 count, though the report doesn't say how much of that was rates.

A foreigner's 2027 rate is the US rate plus a margin. Nobody controls the US rate. The margin is where the work is, and it's what I do when I help clients compare and coordinate financing. The checklists I use for comparing a whole quote, not just the rate, are in my foreign investor starter kit.

The bottom line

I think the 30-year spends most of 2027 above 7%, and I'd plan for it. Not because I'm sure, but because planning for 7.5% and getting 6.5% is a pleasant surprise, and planning for 6.5% and getting 7.5% is a deal that doesn't work.

If I were buying this quarter, I'd do two things. I'd run every number at today's rate. And I'd negotiate the seller credit before the price, because in this market the seller is paying, and a credit spent on points is the only part of the rate you control.

Investing isn't about certainties. It's about shifting the odds, and a rate somebody else paid for shifts them more than any forecast.