Mortgage interest rates are hitting record lows for 2025, dropping below 6% for the second consecutive day.
The average interest rate for a 30-year fixed-rate mortgage has decreased to 5.97% APR, as reported by Zillow. This is 2 basis points lower than yesterday and 11 basis points lower than a week ago. (Refer to the chart below for more details.) A basis point equals one one-hundredth of a percentage point.
While the drop from yesterday may seem small, breaching the 6% threshold can signify a significant change. If you are in the market for a new home or considering refinancing, now might be the time to closely monitor rates. Even if rates are not decreasing daily, a downward trend over the past month can signal a good time to act.
It’s important to note that markets are closed on weekends, so the rates you see on Friday are unlikely to change until Monday, if at all.
Average mortgage rates in the last 30 days
📉 When can we expect mortgage rates to drop?
Mortgage rates are constantly fluctuating due to various factors such as inflation reports, job numbers, Federal Reserve meetings, and global news. Even small changes in the bond market can impact mortgage rates.
This week, there is keen interest in the state of the economy. The latest consumer price index report showed inflation numbers slightly below investor expectations. This could lead the Federal Reserve to focus on monetary policies that support the weak labor market, potentially resulting in a rate cut at their upcoming meeting.
It’s worth noting that mortgage rates are more likely to decrease before a Federal Reserve meeting, as is the case currently, than after a rate cut has been confirmed.
🔁 Is refinancing a good option?
Refinancing could be beneficial if today’s rates are at least 0.5 to 0.75 percentage points lower than your current rate, especially if you plan to stay in your home long enough to offset closing costs.
Given the current rates, it might be a good time to consider refinancing if your existing rate is around 6.47% or higher.
Consider your objectives: Are you looking to reduce your monthly payments, shorten your loan term, or tap into your home equity? Depending on your goals, you may be more inclined to opt for a cash-out refinance over a rate-and-term refinance, as long as the overall costs are lower than retaining your original mortgage and adding a HELOC or home equity loan.
For those seeking a lower rate, BW’s refinance calculator can help estimate savings and determine the break-even point for refinancing costs.
🏡 Is it time to start looking for a new home?
There isn’t a universal “right” time to start the home buying process; what matters is whether you can comfortably afford a mortgage at today’s rates.
If the answer is yes, don’t worry too much about potentially missing out on lower rates later on; refinancing remains an option. Focus on getting preapproved, comparing lender offers, and determining a monthly payment that aligns with your budget.
Utilize BW’s affordability calculator to estimate your potential monthly payment. If purchasing a new home isn’t feasible right now, there are steps you can take to enhance your buyer profile, such as paying off existing debts and increasing your down payment savings. Not only will this improve your cash flow for future mortgage payments, but it could also secure you a better interest rate when you’re prepared to buy.
🔒 Should I lock in my rate?
If you have received a quote that satisfies you, it may be wise to consider locking in your mortgage rate, especially if your lender offers a float-down option. A float-down feature allows you to benefit from a lower rate if the market shifts during your lock period.
Rate locks shield you from rate increases while your loan is being processed, providing peace of mind in an ever-changing market.
🤓 Nerdy Tip: Mortgage rates can change daily, even hourly. If you’re satisfied with the terms you’ve been offered, don’t hesitate to proceed.
🧐 Why is the rate I saw online not the same as the quote I received?
The advertised rate is typically a sample rate for a borrower with excellent credit, making a substantial down payment, and potentially paying for mortgage points. This may not align with every buyer’s situation.
In addition to external market factors, your customized quote is influenced by your:
-
Location and type of property
Even individuals with similar credit scores may receive different rates based on their overall financial profiles.
👀 If I apply now, will I receive the rate I saw today?
There is a possibility, but even personalized rate quotes can fluctuate until you lock in a rate. Lenders adjust pricing multiple times a day in response to market shifts.