Rates & Loans
How are mortgage rates set?
The short answer
Mortgage rates are driven mostly by the bond market — specifically investor demand for mortgage-backed securities, which tracks broader interest rates and inflation expectations — not set directly by any single lender or the Federal Reserve. On top of that market baseline, your individual rate is adjusted for your credit score, down payment, loan type, and property. National average rates are published weekly by Freddie Mac.
Key points
- The bond market sets the baseline; lenders add a margin.
- The Fed influences rates indirectly, not directly.
- Your rate is personalized by credit, down payment, and loan type.
- Freddie Mac publishes national weekly averages.
Why quotes differ between lenders
Each lender prices in its own costs and margins, so identical borrowers can get different quotes. That is why comparing multiple Loan Estimates on the same day matters. CandidCost shows the current national benchmark so you can see where a quote sits.
Put this to work
Sources
Every claim above traces to a public government source.