Mortgage Interest Rates Today: Rates Rise to 6% as Iran War Stirs Inflation Fears

Mortgage rates ticked back up Thursday after falling below 6% for the first time in over three years just the week before, as fears of rising inflation related to the war in Iran rattled the market. 

The average rate on 30-year fixed home loans rose to 6% for the week ending March 5, up from 5.98% the week before, the lowest since September 2022, according to Freddie Mac. For perspective, rates averaged 6.63% during the same period in 2025.

"Mortgage rates held steady at 6% this week, hovering near their lowest level since 2022," said Sam Khater, Freddie Mac's chief economist. "In fact, rates are down nearly a full percentage point from this time in 2024, spurring activity from buyers, sellers and owners. As a result, refinance activity is up, and purchase applications are ahead of last year’s pace."

The U.S. and Israel on Saturday attacked strategic targets throughout Iran, killing the country’s supreme leader, Ayatollah Ali Khamenei, and other key political figures.  

Realtor.com® senior economist Joel Berner says the ongoing conflict in the Middle East has raised concerns of growing inflation, driving up the 10-year Treasury yield, which mortgage rates closely track. 

Berner points out that rates had been on a steady downward trajectory since last summer, and even this week’s higher readout is still lower than this time last year. At the same time, he concedes that "it is still a bit disappointing to have only spent one week in the 5% territory."

For rates to resume their descent, the economist argues that the coming months must show that the operation in Iran is not putting upward pressure on consumer prices at home. 

“Given the major jump in oil prices this week and the increased shipping costs that go with that, this positive news on inflation may be hard to come by,” warns Berner. 

As of Thursday morning, Brent crude, the global benchmark for oil, had surged more than 15% from before war, reaching $84—the highest price in more than a year.

For the housing market to improve, the economist says mortgage rates must remain below the 6% benchmark to spur buyer activity at a time when sales activity is unusually slow, and also to mitigate the “lock-in” effect that has been keeping fresh listings limited. 

Buyers have been enjoying improved market conditions over the past several months, with lower home prices, higher inventory and mortgage rates that had been trending down until this week. However, this dynamic has not translated into more closings, and Berner says subdued consumer confidence is to blame.  

“Economic uncertainty is not a position from which many people are interested in making the largest purchase of their life, and the conflict in Iran just added to the anxiety pile that already included tariffs, last year’s soft labor market, stock market volatility, and AI job loss concerns,” he says. “Sub-6% mortgage rates would help alleviate affordability issues for buyers, but buyers have quite a bit else on their minds as well."

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to increase. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you're able to pay back the loan.