Mortgage Rates Explained 📉🏡 Why mortgage rates don’t always drop when the Fed cuts rates A common misconception I hear all the time: “Once the Fed cuts rates, mortgage rates will immediately fall.” That’s not exactly how it works. The Fed Funds Rate is the overnight rate banks charge each other. It mainly affects: • Credit cards • HELOCs • Auto loans • Short-term borrowing Mortgage rates are different. They’re driven by: • The 10-Year Treasury • Mortgage-Backed Securities (MBS) • Inflation rep

Secured Overnight Financing Rate (SOFR) Definition and History