Mortgage Rates Update: October 16th, 2025
- Bill Knudson
- Oct 18
- 1 min read
The week ending October 16th, 2025, saw a continued, though marginal, decline in 30-year fixed mortgage rates, offering a brief reprieve to borrowers. Crucially, the decoupling from Treasury movements observed last week has amplified, widening the spread between the 30-year mortgage and the 10-year T-Note. This indicates a persistent level of caution among mortgage-backed security investors
For a $100,000 loan at 6.27%, the monthly payment decreased $2 to $617
Upcoming releases:
Next new jobs Oct 3 (Fed Govt shutdown, no data released)
Next CPI release is Oct 15 (Fed Govt shutdown, no data released)
Next Fed meeting is Oct 29 (The Fed decreased rates 25bp on Sept 17)
Key Developments
The 30-year fixed mortgage rate settled at 6.27%, a 3 basis point (bp) decrease. This occurred while the 10-Year Treasury rate decreased by a more significant 15bp. The disparity in movement caused the spread to expand by 12bp.
Key market metrics as of 10/16/2025 are:
30-Year Fixed Mortgage Rate: 6.27%.
10-Year T-Note Rate: 3.99%.
Current Spread (30-yr minus 10-yr): 228bp.
Historical Spread: 168bp.
The current spread is now 60bp above the historical average, creating a substantial "safety cushion". This widening gap suggests that lenders are still pricing in significant risk, likely reflecting persistent economic uncertainties rather than purely benchmark rate movements. For a $100,000 loan, the monthly payment decreased by $2 to $617. We will closely monitor whether the mortgage rate begins to converge back toward its historical relationship with the 10-Year Treasury.
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