The average 30-year fixed mortgage rate remains stable at just under 6.70% as of Thursday, March 13, 2025, following a recent consumer price index report that showed inflation easing to 2.8% year over year. This is a slower pace compared to January’s 3% reading and closer to the Federal Reserve’s 2% target. Although this development is not expected to impact the Fed’s upcoming policy meeting, where the federal funds rate is anticipated to remain within a range of 4.25% to 4.50%, it is essential to note that mortgage rates are indirectly influenced by various factors such as inflation, employment rates, the bond market, and the overall economic landscape.
With mortgage rates currently at their lowest levels since mid-December, now is an opportune time for prospective homeowners to explore mortgage options and potentially secure a favorable rate. The average rate for a 30-year fixed mortgage for purchase is 6.68%, while for refinancing it is 6.69%. Rates for a 15-year mortgage stand at an average of 5.95% for both purchase and refinance. For a 30-year fixed jumbo mortgage, the average rate is 6.70%.
It’s important to consider various factors when seeking a mortgage, including inflation rates, economic conditions, housing market trends, and the Federal Reserve’s target interest rate. Lenders also evaluate your credit score, down payment amount, property details, and loan terms. Given that mortgage rates can fluctuate daily, it is advisable to lock in a rate when you are comfortable with the overall terms of your mortgage.
For more detailed information on mortgage shopping and recent rate trends, Freddie Mac’s weekly mortgage report indicates a decline in rates, with the average 30-year fixed-rate mortgage at 6.63% and the 15-year fixed-rate mortgage at 5.79%. These figures are lower compared to the previous year’s averages. According to Sam Khater, Freddie Mac’s chief economist, the recent decline in rates boosts homebuyers’ purchasing power and could incentivize real estate activity during the spring season.
Homeowners now have a chance to refinance their mortgages, with the latest data showing that the refinance share of market mortgage applications has reached nearly 44%, the highest level since mid-December.
Freddie Mac updates its Prime Mortgage Market Survey data weekly on Thursdays at noon ET. There are four key factors that can influence your mortgage rate:
1. Credit score: Your credit score plays a significant role in the mortgage rate you are offered. Borrowers with good to excellent credit scores, typically over 670, are more likely to secure the best rates. Even with fair credit, you may still find decent mortgage offers.
2. Down payment: Putting more money down upfront can lead to a lower interest rate. A down payment of at least 20% of the home’s purchase price can result in a reduced interest rate and also help avoid mortgage insurance costs.
3. Loan term: While the 30-year mortgage is popular, shorter loan terms like 20, 15, or 10 years often come with lower interest rates but higher monthly payments. Longer terms may offer lower monthly payments but result in higher total interest paid over the life of the loan.
4. Interest rate type: Mortgages come in fixed and variable rate options. Fixed-rate mortgages maintain a consistent interest rate, while adjustable-rate mortgages (ARMs) start with a fixed rate that later adjusts based on market conditions. Choosing between the two depends on your financial goals and risk tolerance.
Understanding the difference between prequalification and preapproval is crucial in the homebuying process. Prequalification provides a rough estimate of how much you can borrow based on basic information, while preapproval involves a detailed financial assessment by a lender to determine a more accurate loan amount.
Keep track of mortgage rate changes, which are influenced by factors like the benchmark federal funds target interest rate set by the Federal Reserve. Although mortgage rates do not directly mirror the Fed rate, they are impacted by similar economic indicators considered by the Fed, such as inflation.
The Federal Reserve raised interest rates 11 times between March 2022 and July 2023 to address high inflation levels after the pandemic. However, on September 18, the Fed made a much-anticipated half-point cut to its federal funds target rate, followed by two quarter-point cuts in November and December. On January 29, 2025, the Fed held benchmark rates steady at 4.25% to 4.50%, pausing after three consecutive cuts to focus on stabilizing inflation at around 2%. The Fed stated its commitment to monitoring economic data and risks in determining future rate adjustments. Expectations for the Fed’s March 18–19, 2025 policy meeting suggest rates will remain unchanged. Economists are closely watching inflation and labor reports for signs of future rate cuts, with recent data indicating a decrease in inflation and moderate job growth. Despite economic uncertainties, Federal Reserve Chair Jerome Powell remains optimistic about the US economy’s overall health.
At the University of Chicago policy forum on March 7, it was emphasized that there is no need to rush, and we are well positioned to patiently wait for more clarity on the Trump administration’s policy changes. The rate-setting panel led by Powell will reveal its rate decision at the end of the meeting on Wednesday, March 19, 2025, at 2 p.m. Eastern Time.
Looking ahead, it’s important to know when the next Federal Reserve meeting is and how it may impact your finances. Additionally, recent changes in the National Association of Realtors (NAR) settlement and realtor commission regulations were discussed. A judge approved a $418 million antitrust settlement on April 23, 2024, ending the practice of real estate broker commissions up to 6%. Starting August 17, 2024, real estate agents must provide interested buyers with a representation agreement before home tours, promoting transparency and empowering consumers to negotiate agent fees.
While the NAR settlement is not expected to affect mortgage rates, it allows consumers to potentially save money on agent services. For more information on homebuying, mortgage refinancing, and understanding mortgage rates, check out our informative guides and FAQs. Whether you’re a first-time homebuyer or considering refinancing, there are resources available to help you navigate the process with confidence.
An adjustable-rate mortgage (ARM) differs from fixed-rate loans by starting at a fixed rate for an initial period of three years or longer before adjusting to a higher rate and further adjusting periodically throughout the loan’s lifespan. In the case of a 5/1 ARM, the first number denotes the fixed rate period (five years) while the second number indicates how often the rate readjusts thereafter (annually). Discover how to convert your ARM into a fixed-rate mortgage by exploring our refinancing guide.
Can you negotiate your mortgage rate? It’s unlikely as lenders base rates on market conditions and financial factors. However, you can inquire about alternative cost-saving methods when comparing lenders, such as obtaining lower rates by paying upfront fees known as “mortgage points.” Each point may cost 1% of your mortgage amount, potentially saving you thousands of dollars on a loan of $500,000. Learn more in our guide on securing the best mortgage rates.
What happens to your mortgage after your passing? Unlike other debts settled through your estate, mortgages are non-transferable, requiring full repayment for the property title to be transferred. Only those listed on the loan are liable for the mortgage.
If you own a home, can you borrow against its equity for significant or unforeseen expenses? Yes, leveraging your home’s equity allows you to access cash for purposes like home improvements or debt consolidation without refinancing, all while retaining your low-rate mortgage. This option typically requires good credit and sufficient home equity. Explore ways to access your home equity as rates decrease.
Please note that the rates mentioned were recorded on Thursday, March 13, 2025, at 6:15 a.m. ET and are subject to change. For more information, refer to the sources cited below.
