EverHint - Mortgage Rates — January 20, 2026 — Edge Higher After Extended Stability

Summary

The 30-year fixed mortgage rate rose to 6.21% on January 20, 2026, posting a significant +0.14% daily increase that breaks a period of relative stability near annual lows. This uptick, mirrored across all mortgage products, reflects rising bond yields amid geopolitical tensions (Greenland tariff threats) and shifting Federal Reserve rate cut expectations. Despite the daily increase, rates remain down -0.87% year-over-year and sit at just 18% of the 52-week range, maintaining favorable positioning for homebuyers and refinancers compared to the 7%+ environment of early 2025.

Current Mortgage Rates Table

All products remain in favorable positioning 🟢 (0-25% of 52-week range), indicating rates are near their most affordable levels of the past year despite today's uptick.

Rate Movement Analysis

Daily Changes: Significant Increase Across Most Products

Today's rate movements represent the sharpest daily increase in several weeks, with most products rising by significant margins (5+ basis points):

• 30-Year Fixed: +14 bps to 6.21% (significant increase)
• 15-Year Fixed: +15 bps to 5.75% (significant increase, largest daily move)
• 30-Year FHA: +13 bps to 5.88% (significant increase)
• 30-Year VA: +13 bps to 5.90% (significant increase)
• 7/6 SOFR ARM: +9 bps to 5.72% (significant increase)
• 30-Year Jumbo: +3 bps to 6.38% (moderate increase)

The synchronized upward movement across conventional, government-backed, and adjustable-rate products indicates broad-based bond market pressure rather than product-specific dynamics. The 15-year fixed saw the largest absolute increase (+15 bps), while jumbo loans showed relative resilience with only a +3 bps uptick. This suggests the move was driven by Treasury market volatility rather than credit spread widening.

Weekly Trend: Reversing Recent Stability

The 1-week changes mirror the daily pattern, with most products up 13-16 basis points over the past five trading days. This represents a moderate weekly increase that reverses the stability seen in late December and early January:

• Conventional and government-backed loans up 13-15 bps weekly
• ARM showing minimal weekly change (+4 bps), suggesting shorter-term rate sensitivity
• Jumbo loans up just 3 bps, indicating high-balance borrowers face less pressure

The consistency between daily and weekly changes suggests recent bond market weakness accelerated today rather than being spread evenly across the week.

Monthly & Yearly: Strong Long-Term Improvement Despite Recent Uptick

Monthly changes remain minimal, with most products flat to down slightly:

• Conventional 30-year: -4 bps (minimal improvement)
• FHA and VA: unchanged month-over-month
• ARM: -10 bps (modest improvement)
• Jumbo: -3 bps (minimal improvement)

Year-over-year comparisons show dramatic affordability improvement, demonstrating that today's uptick is noise within a favorable long-term trend:

• ARM leads declines: -125 bps YoY (from ~6.97% to 5.72%)
• Jumbo strongest conventional decline: -97 bps YoY (from ~7.35% to 6.38%)
• 30-Year Fixed: -87 bps YoY (from ~7.08% to 6.21%)
• 15-Year Fixed: -75 bps YoY (from ~6.50% to 5.75%)
• Government-backed (FHA/VA): -58 to -59 bps YoY

For context, a borrower on a $400,000 30-year fixed loan at 7.08% (one year ago) had a principal & interest payment of approximately $2,666/month. Today's 6.21% rate produces a payment of around $2,450/month—a savings of $216/month or $2,592 annually. This affordability improvement remains intact despite today's rate increase.

Product Spread Analysis

30-Year Fixed vs. 15-Year Fixed: Normal Spread

Current spread: 6.21% - 5.75% = 0.46% (46 basis points)

The 30 vs. 15-year spread sits comfortably within the normal range of 0.40-0.60%, indicating balanced demand for both products. At 46 bps, borrowers considering the 15-year option face a meaningful but not exceptional rate advantage. For a $400,000 loan:

• 30-year at 6.21%: ~$2,450/month P&I
• 15-year at 5.75%: ~$3,315/month P&I

The $865 monthly premium for the 15-year payoff reflects not just the shorter term but also the 46 bps rate savings. Borrowers with sufficient cash flow can save significantly on total interest by choosing the 15-year option.

Conventional vs. Government-Backed: FHA/VA Advantage

FHA advantage: 6.21% - 5.88% = 0.33% (33 basis points)
VA advantage: 6.21% - 5.90% = 0.31% (31 basis points)

Government-backed loans (FHA and VA) offer 30-35 bps savings over conventional 30-year fixed mortgages, providing meaningful affordability benefits for eligible borrowers:

• FHA borrowers save ~$65/month on a $400,000 loan vs. conventional
• VA borrowers save ~$60/month on a $400,000 loan vs. conventional

These spreads are wider than typical, suggesting conventional mortgage pricing may be incorporating some credit spread premium or that FHA/VA programs are being competitively priced to support housing demand. Eligible buyers (veterans, first-time buyers with lower down payments) have clear incentive to utilize these programs.

ARM vs. Fixed: Narrow Spread Limits ARM Appeal

ARM vs. 30-Year Fixed spread: 6.21% - 5.72% = 0.49% (49 basis points)
ARM vs. 15-Year Fixed spread: 5.75% - 5.72% = 0.03% (3 basis points)

The 7/6 SOFR ARM at 5.72% offers only a 49 bps advantage over the 30-year fixed, which is relatively narrow by historical standards. More striking is the ARM's proximity to the 15-year fixed (just 3 bps higher), indicating that the yield curve inversion makes ARMs less attractive:

• Borrowers considering ARMs get minimal savings vs. locking in a 15-year fixed
• The 30-year fixed spread of 49 bps may not justify ARM risk for many borrowers
• ARM appeal typically requires 75-100+ bps savings to offset adjustment risk

However, the ARM's -125 bps year-over-year improvement (strongest of all products) reflects market expectations for Federal Reserve rate cuts in 2026. Borrowers confident in near-term rate cuts may still find ARMs attractive, though the narrow spread suggests most are choosing the certainty of fixed rates.

Jumbo Premium: Within Normal Range

Jumbo premium: 6.38% - 6.21% = 0.17% (17 basis points)

The jumbo mortgage premium of 17 bps sits at the low end of the normal 15-30 bps range, indicating:

• Credit spreads remain compressed for high-balance borrowers
• Jumbo market functioning normally without liquidity stress
• Competition among jumbo lenders is robust

High-balance borrowers (loans exceeding $806,500 in most markets) face minimal pricing penalty compared to conforming loans. This favorable spread environment benefits luxury home markets and high-cost coastal areas.

52-Week Range Context

Near Lows Across All Products

Every mortgage product sits in favorable positioning within its 52-week range, clustered between 8% and 24% of total range:

7/6 SOFR ARM: 8% of range 🟢
Current 5.72% sits just 13 bps above the 52-week low of 5.59% and 153 bps below the high of 7.25%. This is the strongest positioning of any product, reflecting aggressive improvement in short-term rate expectations.

30-Year Fixed: 18% of range 🟢
Current 6.21% is 20 bps above the 52-week low of 6.01% and 92 bps below the high of 7.13%. Despite today's uptick, the benchmark rate remains in the bottom quintile of its annual range.

15-Year Fixed: 21% of range 🟢
Current 5.75% is 20 bps above the low of 5.55% and 77 bps below the high of 6.52%. The 15-year positioning mirrors the 30-year, indicating consistent improvement across the yield curve.

30-Year Jumbo: 21% of range 🟢
Current 6.38% is 28 bps above the low of 6.10% and 107 bps below the high of 7.45%. Despite carrying the highest absolute rate, jumbos show identical range positioning to other products, suggesting proportional improvement.

30-Year FHA: 22% of range 🟢
Current 5.88% is 19 bps above the low of 5.69% and 66 bps below the high of 6.54%.

30-Year VA: 24% of range 🟢
Current 5.90% is 20 bps above the low of 5.70% and 65 bps below the high of 6.55%.

Affordability Implications

The clustered positioning near annual lows (all products between 8-24% of range) indicates broadly favorable affordability conditions despite today's rate increases. Borrowers have significantly more downside cushion (rates could fall 8-24% of range back to lows) than upside risk (rates would need to rise 76-92% of range to reach annual highs). This asymmetry supports housing market activity, as prospective buyers and refinancers face limited urgency but substantial opportunity relative to 2025 rate peaks.

Year-over-Year Comparison

Dramatic Affordability Improvement

Comparing January 20, 2026 to January 20, 2025 reveals large-scale rate declines across all products:

ARM: -1.25% (from ~6.97% to 5.72%)
The adjustable-rate product shows the strongest annual improvement, declining 125 basis points. This reflects both Federal Reserve rate cuts (lowering SOFR benchmarks) and market expectations for additional cuts in 2026. ARM borrowers from a year ago face reset risk, but new ARM originations benefit dramatically.

Jumbo: -0.97% (from ~7.35% to 6.38%)
High-balance loans saw the second-largest decline at 97 bps, suggesting credit spreads compressed significantly as liquidity conditions normalized and recession fears faded.

30-Year Fixed: -0.87% (from ~7.08% to 6.21%)
The benchmark conventional mortgage improved 87 bps, representing a 12.3% decline in rate level. For perspective:

• $400,000 loan at 7.08%: $2,666/month P&I
• $400,000 loan at 6.21%: $2,450/month P&I
• Annual savings: $2,592

15-Year Fixed: -0.75% (from ~6.50% to 5.75%)
The 15-year product improved 75 bps, slightly lagging the 30-year due to flatter yield curve dynamics but still representing an 11.5% rate decline.

Government-Backed (FHA/VA): -0.58 to -0.59%
FHA and VA loans improved 58-59 bps, underperforming conventional products. This may reflect:

• Government pricing adjustments to manage volume
• Credit risk premium stabilization after pandemic-era concerns
• Baseline FHA/VA rates starting from lower absolute levels

Refinancing Opportunity Assessment

Borrowers who originated mortgages at 2025 peak rates (7%+) face substantial refinancing incentives:

• 30-year fixed borrowers above 7% can reduce rates by 75-90 bps
• 15-year fixed borrowers above 6.5% can save 70-80 bps
• ARM borrowers above 7% can lock in fixed rates 60-80 bps lower

Even accounting for closing costs (typically 2-3% of loan amount), the monthly savings justify refinancing for most borrowers who financed in Q1-Q2 2025. A borrower with a $400,000 loan at 7.00% saving $200/month by refinancing to 6.21% recoups $8,000 in closing costs in 40 months (3.3 years), making refinancing attractive for anyone planning to stay in their home beyond that horizon.

Market Context

Rate Environment: Moderate 6-6.5% Range

The current 6.21% 30-year fixed rate sits in the moderate 6-6.5% range, historically supportive of steady housing demand without overheating:

Historical Perspective:

• Below 6%: Strong demand, potential overheating risk
• 6-6.5%: Moderate demand, sustainable activity (current)
• 6.5-7%: Cooling demand, affordability pressures emerging
• Above 7%: Demand suppression, refinancing activity collapses

At 6.21%, the housing market operates in a "Goldilocks" zone—rates are low enough to support healthy transaction volumes but high enough to prevent speculative excesses. This environment favors:

• Move-up buyers with equity in existing homes
• First-time buyers with stable incomes and savings
• Cash-out refinancers consolidating high-interest debt
• Investors focused on cash flow rather than pure appreciation

The 87 bps improvement from a year ago materially expands affordability, but rates remain elevated versus the 2020-2021 sub-3% environment, preventing return to pandemic-era frenzy.

Refinancing Opportunity: Selective but Real

Who should consider refinancing:

• Borrowers with rates above 7% (clear opportunity)
• Borrowers with rates 6.75-7% (evaluate based on tenure and closing costs)
• ARM holders facing rate resets above 6.5% (lock in fixed rates)

Who should wait:

• Borrowers with rates below 6.25% (marginal savings unlikely to justify costs)
• Borrowers planning to sell within 3-5 years (insufficient time to recoup costs)
• Borrowers with low credit scores or changed financial circumstances (may not qualify)

The current environment creates a bifurcated refinancing opportunity: substantial for those who financed at peak rates in 2025, but limited for those who locked in during earlier low-rate periods.

Fed Policy Connection: Rate Cut Expectations Under Pressure

Today's +14 bps daily increase in the 30-year fixed rate correlates with:

• Bond market volatility from geopolitical tensions (Greenland tariff threats)
• Revised Fed expectations as inflation remains sticky
• Term premium expansion reflecting uncertainty about long-term policy path

The ARM's strong year-over-year performance (-125 bps) but minimal weekly change (+4 bps) suggests markets still expect Federal Reserve rate cuts in 2026, but the timing and magnitude are less certain than a month ago. Recent economic data (strong labor markets, resilient consumer spending) reduces urgency for aggressive Fed easing, supporting higher long-term rates even as short-term cut expectations persist.

Implications for mortgage borrowers:

• Short-term volatility likely as markets digest geopolitical and inflation developments
• Long-term downtrend intact based on year-over-year positioning
• ARM risk-reward shifting as Fed cut certainty diminishes
• Fixed-rate lock-in appeal rising for borrowers seeking stability

Key Takeaways

• 30-year fixed at 6.21%: Significant +14 bps daily increase breaks extended stability near lows
• Synchronized upward movement: All products rose 3-15 bps daily on bond market pressure
• Still near annual lows: 30-year at 18% of 52-week range, just 20 bps above low of 6.01%
• Strong YoY improvement intact: Down -87 bps from 7.08% a year ago; saves $216/month on $400K loan
• ARM leads annual declines: 7/6 SOFR ARM down -125 bps YoY, strongest improvement at 5.72%
• Normal product spreads: 30 vs 15-year at 0.46% within typical range; FHA/VA offer 31-33 bps savings
• Jumbo premium compressed: 17 bps over conventional, at low end of normal 15-30 bps range
• Refinancing opportunity: Borrowers above 7% from 2025 can save 75-90 bps despite today's uptick
• Moderate rate environment: 6.21% supports steady demand without overheating; favorable long-term positioning
• Fed uncertainty rising: Geopolitical volatility and sticky inflation cloud rate cut timing; fixed-rate appeal growing

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This is not financial advice. Mortgage rates change frequently and vary by lender,
borrower credit, loan-to-value ratio, and other factors. Always consult with
qualified mortgage professionals.
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