If you’re staring at a loan document or checking your latest mortgage adjustment, you’ve probably seen those four letters: SOFR. It sounds like something a plumber would use to fix a leak, but it’s actually the engine under the hood of the American economy. Specifically, the sofr rate today 30 day average is the number that determines if you’re paying more for your debt this month or catching a break.
As of January 15, 2026, the 30-day average SOFR is sitting at 3.70300%.
That’s a slight nudge down from where we were just a few weeks ago. Honestly, if you aren't a day trader or a corporate treasurer, these tiny decimal points might seem like noise. But for anyone with an adjustable-rate mortgage (ARM) or a business line of credit, that 3.70% figure is the difference between a "manageable" payment and a "wait, why is my bill higher?" moment.
The Real Deal on the 30-Day Average
Most people get confused because they see the "overnight" rate—which is currently around 3.64%—and wonder why their loan uses a different number. Here is the thing: the 30-day average is a "compounded" number. It’s basically a smoothed-out version of the last month of daily rates.
Think of it like the weather. The daily SOFR is like today's temperature; it can spike if there’s a weird "storm" in the repo market (where banks trade cash for Treasuries). The 30-day average is the climate. It’s much harder to move and gives a better picture of where things are actually headed.
Why the Rate is Moving Right Now
We’ve seen a pretty steady decline since the end of 2025. Back in mid-December, this same 30-day average was hovering near 3.94%. Why the drop? Basically, the Federal Reserve has been in a "trimming" mood. At the final meeting of 2025, they cut the target range to 3.50% - 3.75%.
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When the Fed cuts, SOFR follows. It’s not a perfect 1:1 dance, but they definitely share the same playlist.
How This Hits Your Daily Life
If you’re sitting on an ARM, your bank doesn't just pick a number out of a hat. They take the sofr rate today 30 day average, add a "margin" (their profit), and that’s your rate.
Let's look at a real-world scenario. Say you have a loan with a 2% margin.
- Today's Calculation: 3.70% (SOFR) + 2.00% (Margin) = 5.70%
- Last Month's Calculation: 3.94% (SOFR) + 2.00% (Margin) = 5.94%
On a $400,000 loan, that 0.24% difference isn't just pocket change. It’s real money staying in your bank account instead of going to the lender.
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Business Loans and Lines of Credit
For small business owners, SOFR is even more critical. Most commercial "revolvers" or equipment leases are tied to the 30-day or 90-day averages. Because the 30-day is backward-looking—meaning it accounts for what happened over the last month—it’s a bit of a "lagging" indicator. If rates are falling, the 30-day average will be slightly higher than the "Term SOFR" (which is what the market thinks will happen next).
What Most People Get Wrong About SOFR
There’s a lingering myth that SOFR is just "LIBOR with a new name." It isn't.
LIBOR (the London Interbank Offered Rate) was based on what bankers said they would charge each other. It was basically a "trust me, bro" system that got famously manipulated. SOFR is based on actual transactions—over $1 trillion of them every single day. It’s secured by U.S. Treasuries, making it much more transparent.
But there’s a catch.
Because SOFR is "risk-free" (meaning it’s backed by government bonds), it doesn't always behave the way LIBOR did during a crisis. In a massive market panic, SOFR might actually drop because everyone is rushing to buy Treasuries, while the rates banks charge each other for risky loans would skyrocket. This "basis risk" is something your bank worries about, but for you, it generally means a more stable benchmark.
Looking Ahead to 2026
The big question everyone asks is: "Where is it going?"
Jerome Powell’s term as Fed Chair ends in May 2026. Markets hate uncertainty, and we’re starting to see that reflected in the forward curves. Most analysts expect the Fed to hold steady through the spring. If inflation stays cooling, we might see the 30-day average SOFR dip toward the 3.25% range by the end of the year.
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However, if the labor market stays weirdly tight or energy prices spike, don't be surprised if this "slow slide" turns into a plateau.
Actionable Steps for Borrowers
- Check Your "Reset" Date: If you have an adjustable loan, find out exactly which day of the month your rate resets. If it’s early in the month, you’re currently benefiting from the December cuts.
- Compare to Term SOFR: If you're negotiating a new business loan, ask if you can use 1-Month Term SOFR instead of the 30-day average. Since Term SOFR is forward-looking, it often prices in Fed cuts faster than the backward-looking average.
- Watch the Fed "Dot Plot": The next big move for the 30-day average will be telegraphed by the Fed’s summary of economic projections. If the "dots" move lower, your interest expenses are going to follow.
- Locking In? With the 30-day average at 3.70%, we are in a much better spot than a year ago. If you’ve been waiting to refinance a high-interest bridge loan, the current trend is finally working in your favor.
The sofr rate today 30 day average isn't just a stat for people in suits on Wall Street. It’s a pulse check for your own financial health. Staying on top of it means you won't be surprised when your next statement hits the inbox.