Charge-Off Rate on Single-Family Residential Mortgages

The Federal Reserve Board's net charge-off rate on residential mortgages and home equity lines at U.S. commercial banks was 0% in Q2 2026, the same as in Q1 2026. It was the same a year earlier. The Board seasonally adjusts the series, removing the regular calendar pattern so one quarter can be compared with the next.

The latest reading rounds to zero. Because the rate is net, it prints above zero when write-offs exceed money recovered on loans written off earlier, below zero when recoveries are larger, and at zero when the two roughly cancel out. A zero does not mean banks had no mortgage losses. Near zero the rate sits at the limit of its two-decimal rounding, so a move of a hundredth of a point is not a change worth reading.

The rate has matched the quarter before in each of the last six quarters. The Board revises past seasonally adjusted quarters without a published policy, so the newest reading can still change.

A charge-off is an accounting step. Banks remove a loan balance from their books and charge it against loss reserves, and money later recovered is subtracted. The rate is that net amount as a share of average home-loan balances over the quarter, multiplied by four to state it as an annual rate. Under bank regulators' policy, a bank values the home no later than 180 days past due and charges off any balance above the property's value less the cost to sell. A loan well covered by the home's value can be behind without being charged off, so a low rate does not mean few borrowers are late; Mortgage Delinquency at the same banks is tracked separately.

The series covers loans secured by one- to four-family homes, including first and second liens and home equity lines, held by insured U.S.-chartered commercial banks. Loans banks have sold, and loans at savings institutions, credit unions and nonbank lenders, are outside it. It counts dollars, not homes or borrowers, and it is not a foreclosure rate: Foreclosure filings and foreclosure starts vs. repossessions count properties. Readings before 2001 were partly estimated by the Board, and a 2010 accounting change (FAS 166 and 167) altered which loans banks carry on their books, so this page draws no comparisons from before 2010.