For more than a year, through 2024 and 2025, the U.S. Federal Reserve cut its policy rate. Over that same stretch, the 30-year mortgage did not fall: it rose. And on September 16 the Fed raised rates again.
It looks like a contradiction. It is not.
The Fed sets the short-term rate, the one banks charge each other overnight. The 30-year fixed mortgage tracks something else: the 10-year Treasury yield, which moves on its own. That yield went up and pulled the mortgage with it. Today the 30-year fixed costs 7.12%, according to the weekly survey of the Mortgage Bankers Association.
Anyone waiting for the Fed to cut before buying is watching the wrong indicator.
The exception: the adjustable-rate loan
In the U.S. there are loans that fix the rate for the first 3, 5 or 7 years and then reset it periodically. Those do track the short-term rate the Fed controls. Today they are cheaper: in the same survey, the one fixed for five years costs 6.10%. Almost 1 in 10 applications already picks it.
It is a bet. If the Fed cuts, the payment falls with it. If not, the payment rises when the fixed period ends. These loans carry caps on each adjustment, but caps limit the increase; they do not prevent it.
Chile works differently
There, the norm is a fixed rate in UF (an inflation-indexed unit), over 20 or 30 years, with roughly 20% down. Chile's central bank currently holds its policy rate above the Fed's, and even so the average mortgage rate was 4.1% in March. It looks cheaper than in the U.S., but that rate is in UF, and the UF rises with inflation, which was 4.1% in the twelve months to August. Measured in pesos, the cost comes close to the sum of the two.
For the Chilean — or any Latin American — buyer in Miami, the comparison is even more misleading. Without U.S. residency, they cannot access the standard loan: Fannie Mae's guidelines, which back conventional lending, exclude them. They end up in specialty foreign-national loans, with a large down payment, a higher rate and often an adjustable one. Or they pay cash, as happened in August with half of the condos sold in Miami-Dade, according to MIAMI REALTORS.
So the question is not when the Fed cuts. It is whether the investment works at today's rate and, if the loan is adjustable, what happens to the payment when the fixed period ends. That math gets done before signing. The mortgage rate and the 10-year yield are published every week and are free to check in the St. Louis Fed's FRED database.
Read the original in El Diario Inmobiliario →
Frequently asked questions
Does the Fed set U.S. mortgage rates?
No. The Fed sets the short-term interbank rate. The 30-year fixed mortgage tracks the 10-year Treasury yield, which moves on its own: through 2024 and 2025 the Fed cut and mortgage rates rose.
What is an adjustable-rate mortgage (ARM) in the U.S.?
A loan that fixes the rate for the first 3, 5 or 7 years and then resets periodically with short-term rates. It is cheaper today (6.10% vs 7.12% fixed, per the MBA), but if rates do not fall, the payment rises when the fixed period ends. Caps limit the increase; they do not prevent it.
Can a foreign buyer without U.S. residency get a conventional mortgage?
No. Fannie Mae's guidelines, which back conventional lending, exclude foreign buyers without lawful residency. They use specialty foreign-national loans, with a larger down payment, a higher and often adjustable rate — or pay cash.
Sources: Federal Reserve, FOMC statements (Sep 18, 2024 to Sep 16, 2026); Mortgage Bankers Association, Weekly Applications Survey, Sep 23, 2026; Freddie Mac PMMS and 10-year Treasury via FRED (Federal Reserve Bank of St. Louis); Consumer Financial Protection Bureau; Central Bank of Chile; INE Chile (CPI to August 2026); Fannie Mae Selling Guide B2-2-02; MIAMI REALTORS, Sep 16, 2026.
This note is reference analysis and does not replace legal, tax or financial advice. We advise buyers with data, from the buyer's side — not the developer's.