Will Mortgage Rates Go Down in 2024? Forecasts & Analysis

If you’ve been watching mortgage rates climb past 6% and wondering whether relief is coming, you’re not alone. Homeowners and buyers across three continents are asking the same thing — and the honest answer depends heavily on where you live. This article cuts through the noise to compare what major forecasters are actually saying about the US, UK, and Irish mortgage markets through 2026, and what that means for your next fixed-rate decision.

US 30-year fixed rate: 6.7% (March 2025) ·
Fannie Mae 2026 forecast: 5.9% ·
UK base rate: 4.5% ·
Irish bank rate cuts (2024): 1.5%

Will mortgage rates drop to 3% again?

The short answer is: not likely in any forecast horizon that analysts are willing to project with confidence. During the pandemic, US 30-year fixed mortgage rates briefly fell below 3% — a historical anomaly driven by emergency Federal Reserve intervention. Today, with the Fed’s policy rate well above zero and term premia rebuilt into bond markets, most mainstream forecasters do not see a return to that territory.

What would it take for rates to return to 3%?

To sustainably return to 3% mortgage rates, analysts say you would need a combination of factors: a pronounced economic slowdown, significant Federal Reserve rate cuts (perhaps 3–4 percentage points or more), and a retreat in inflation expectations that compresses long-term bond yields. Morgan Stanley strategists note that even their optimistic scenario for mid-2026 places 30-year fixed rates only in the 5.50%–5.75% range if the 10-year Treasury yield falls to about 3.75% — well above 3%.

Historical context: when were rates at 3%?

Freddie Mac’s Primary Mortgage Market Survey recorded the US 30-year fixed rate averaging 6.99% in April 2024, with a month-end reading of 7.17%. That peak came after the Fed’s most aggressive tightening cycle in decades. By contrast, during the peak pandemic response in early 2021, rates dropped to roughly 2.65% — a level last seen in the 1970s. The gap between then and now reflects a fundamentally altered interest rate landscape.

Are Irish mortgage rates coming down?

Yes — and Ireland is emerging as a bright spot in an otherwise challenging picture for borrowers. While the European Central Bank raised its key rates by approximately 4.5 percentage points between July 2022 and late 2023, Irish banks passed through only a fraction of those hikes to mortgage borrowers. When the ECB began cutting in 2024, Irish lenders followed suit — but notably more slowly than the euro-area average, creating both a problem and an opportunity for borrowers.

Bank of Ireland rate cuts in 2024

Bank of Ireland announced in November 2024 that it was cutting all fixed mortgage rates by 0.50%, a meaningful reduction that brought its 1-year fixed rate for existing customers down to a range of 3.30%–3.65%. That move signaled competitive pressure among Irish lenders and a willingness to pass ECB cuts through to borrowers — even if the pace of reductions has been slower than some homeowners hoped.

How much have Irish banks reduced rates?

According to Central Bank of Ireland statistics, the weighted-average interest rate on new Irish mortgage agreements stood at 3.52% at end-March 2026, down from significantly higher levels a year earlier. Mortgage Navigators Ireland estimated that around 70,000 households in Ireland had fixed-rate mortgages expiring in 2024, many coming off pandemic-era deals of roughly 2.5%–2.75%. Those borrowers faced a significant step-up in payments when they refixed, though the window for better deals has now opened.

When will mortgage rates go down to 4%?

In the UK, well-qualified borrowers can already access 5-year fixed deals around 4.48%, according to HomeOwners Alliance data. US borrowers may see rates dip toward 5.7%–6.1% by end of 2026 per Bankrate, but the 4% threshold for 30-year US fixed mortgages remains unlikely in the near term given current term premia and Federal Reserve policy. Irish rates are already near or below 4% for many borrowers.

When will mortgage rates go down in the UK?

The UK mortgage market has had a turbulent ride. Following the post-pandemic rate surge that pushed average 2-year fixed rates above 6%, borrowers are now looking at a more stable — if not dramatically lower — horizon. The Bank of England’s base rate sits at 4.5% as of March 2025, and most forecasts expect gradual cuts through 2026, with mortgage rates tracking lower in response.

UK interest rate forecast for the next 5 years

HomeOwners Alliance, using Moneyfacts data, shows that the average UK 2-year fixed-rate mortgage fell from about 5.93% in June 2024 to 5.68% by June 2026. The Office for Budget Responsibility’s November 2025 forecast projects that average mortgage interest rates will rise from roughly 3.7% in 2024 to about 5% by 2029 — suggesting that any near-term relief may be offset by renewed upward pressure later in the decade. By June 2026, one of the lowest available 5-year fixed-rate deals in the UK was around 4.48%, offering a credible locking option for borrowers confident in their future plans.

Will UK mortgage rates go down in 2026?

For UK homeowners wondering whether 2026 will bring relief, the data offers cautious optimism. Fixed-rate deals are trending lower, and the Bank of England’s cutting cycle — once it gains momentum — should provide further support. However, HomeOwners Alliance noted that fixed-rate UK mortgage deals began to rise again in November 2024 after an earlier period of decline, underlining the volatility borrowers face when trying to time the market. The implication is that waiting for the “perfect” moment to fix may be counterproductive.

Should I fix for 2 or 5 years now?

This is the question nagging at every borrower who’s coming up for renewal or entering the market with a new purchase. The answer depends on your personal circumstances, risk tolerance, and how much you value certainty versus flexibility. Here’s how the two main options stack up.

Pros and cons of a 2-year fixed rate

A 2-year fix offers flexibility. If rates fall further, you can refinance at a lower rate when the deal ends. If rates rise, you’ve capped your exposure to the higher environment for only 24 months. The downside is that shorter fixes often come with slightly higher rates than their 5-year counterparts, and you face two rounds of lender arrangement fees over a 4-year period. For borrowers who expect rates to decline and who have room to absorb potential payment increases on renewal, the 2-year option provides optionality.

Pros and cons of a 5-year fixed rate

A 5-year fix provides payment certainty through a full economic cycle. You lock in a known rate regardless of what central banks do in the meantime. For borrowers who have experienced payment shock during recent renewals, the psychological comfort of knowing exactly what you’ll pay each month for half a decade has real value. The trade-off is that if rates fall significantly, you’re stuck above market — and breaking a 5-year fixed deal early typically carries substantial early repayment charges.

What do current rate forecasts suggest?

Most forecasters see a gradual, modest decline in mortgage rates through 2026 rather than a sudden drop. Fannie Mae projects US 30-year fixed rates at 5.9% by end of 2026. Bankrate’s 2026 forecast puts the average at 6.1%, with a possible low of 5.7%. In the UK, a 5-year fix around 4.48% is already available. If these forecasts prove accurate, locking in a longer-term deal now may be sensible — but if you’re confident in your ability to refinance without penalty and expect rates to fall further, a 2-year fix preserves that option.

Mortgage rate predictions for the next 5 years

Across the US, UK, and Ireland, most mainstream forecasts expect mortgage rates to be lower in 2026 than at their 2023–2024 peaks, but not to revisit the ultra-low levels of 2020–2021. The structural drivers — higher policy rates, elevated term premia, and more cautious central bank behavior — are expected to persist. Here’s what the outlook looks like in each market.

US mortgage rate outlook

Fannie Mae’s September 2025 Economic and Housing Outlook forecasts US 30-year fixed rates ending 2025 at 6.4% and 2026 at 5.9%. Bankrate’s 2026 mortgage-rate outlook projects an average of about 6.1%, with a possible low of 5.7% and a high of 6.5%. Morgan Stanley offers a more optimistic scenario — 5.50%–5.75% by mid-2026 if the 10-year Treasury yield falls to 3.75% — but expects rates to rise again in the second half of 2026 and into 2027. The consensus view from Rocket Mortgage, synthesizing forecasts from Redfin, the National Association of Realtors, Fannie Mae, and the Mortgage Bankers Association, suggests rates will “hover around” 6%–6.4% in 2026.

UK mortgage rate outlook

UK mortgage rates are closely linked to Bank of England base rate expectations and global bond yields. The HomeOwners Alliance analysis, drawing on Moneyfacts data, shows modest easing from June 2024 (5.93% average 2-year fixed) to June 2026 (5.68%). The OBR’s November 2025 forecast projects average mortgage rates rising from about 3.7% in 2024 to roughly 5% by 2029 — suggesting near-term relief but renewed pressure later. For borrowers with a 5-year horizon, that trajectory matters: locking in a 4.5% 5-year deal now may look like a bargain by 2029.

Irish mortgage rate outlook

Irish mortgage rates have been slower to follow ECB moves in both directions — up and down. The European Central Bank raised rates by 4.5 percentage points between July 2022 and late 2023, but Irish mortgage rates rose by only about 1.5 percentage points over the same period, reflecting banks’ slower pass-through. Mortgage Navigators Ireland noted that Irish banks may be similarly slow to pass on ECB cuts, meaning new-business mortgage rates may fall more gradually in Ireland than the ECB headline rate suggests. Central Bank of Ireland data showing a 3.52% weighted average on new agreements at end-March 2026 confirms that the direction of travel is downward, but the pace remains measured.

US vs UK vs Ireland: A rate comparison

Three markets, three trajectories. The table below summarizes where rates stand and where forecasters expect them to move.

The pattern is clear: Irish borrowers are already enjoying meaningfully lower rates than their US and UK counterparts, while US borrowers face the highest rate environment of the three markets. The divergence reflects differences in monetary policy, banking market structure, and how quickly lenders pass through central bank moves.

Pros and cons of waiting for lower rates

Key events shaping mortgage rate trends

Four moments tell the story of the past few years and set up the road ahead.

• 2022–2023: Central banks in the US, UK, and euro area raised rates aggressively. US 30-year fixed rates peaked above 7% in late 2023; UK 2-year fixed rates crossed 6%.
• Late 2024: Bank of Ireland cut all fixed rates by 0.50%. UK mortgage rates edged higher, then fell. The ECB began cutting, with Irish banks passing through partial reductions.
• March 2025: US 30-year fixed rate at 6.7%. UK base rate at 4.5%. Irish weighted average on new mortgage agreements at 3.52%.
• End of 2026: Fannie Mae forecasts US 30-year fixed rate at 5.9%. Bankrate sees an average of 6.1%. UK rates expected to be modestly lower than today.

What the experts are saying

Beyond the numbers, several themes emerge from the expert commentary worth weighing as you form your own view.

Bankrate quoted NAR Chief Economist Lawrence Yun projecting that US mortgage rates would average about 6% throughout 2025, which implies some easing from the 7%+ levels seen in 2023 but not a return to 3%–4% territory.

Rocket Mortgage (citing Lawrence Yun, Chief Economist, National Association of Realtors)

Bankrate analysts stress that borrowers often over-focus on timing rate moves, whereas affordability is driven by a combination of rate, price, income, and tax factors — implying that waiting for small forecast rate declines may not always offset rising home prices or lost years of amortization.

Bankrate (2026 mortgage-rate outlook)

Morgan Stanley’s analysis notes that even if US mortgage rates dip toward the mid-5% range in 2026, affordability will remain stretched because home prices are expected to keep rising modestly and because many existing homeowners hold much cheaper fixed rates from the pandemic era, limiting supply.

Morgan Stanley Investment Research

The Central Bank of Ireland’s March 2026 release reported that the average rate on outstanding Irish mortgage loans remained higher than on new agreements, reflecting a large stock of older, more expensive loans that had not yet been refinanced.

Central Bank of Ireland retail interest rate statistics

Confirmed facts vs. what’s still uncertain

For US borrowers, the most likely outcome is a slow grind lower — from 6.7% today toward the high-5% range by end of 2026, per Fannie Mae and Bankrate. UK borrowers are already seeing modest relief, with 5-year fixed deals below 4.5% available for well-qualified applicants. Irish borrowers are in the best position: rates have already fallen, and further ECB cuts should provide additional tailwind — though the pace will depend on how aggressively Irish banks pass savings through to variable-rate and new-fixed customers.

For those weighing whether to fix now or wait, the deciding factor is not which direction rates move — it’s how much certainty you need in your monthly budget, and whether the potential savings from waiting outweigh the risk of rates staying elevated longer than expected.