Average mortgage rates are trending lower as of Friday, February 7, 2025, following a tumultuous week marked by significant losses in the stock market due to President Trump’s new tariffs. This situation has increased concerns about a potential recession, overshadowing expectations for the upcoming job growth report for March. Traders are now placing bets on a 38% probability of the Federal Reserve cutting rates by a quarter-point next month, based on data from CME FedWatch.
Mortgage lenders closely monitor the Fed rate, which reacts to economic factors influencing borrowing rates, including mortgages. With the 30-year fixed benchmark rate at a six-month low, now is an opportune time to start considering a mortgage. Depending on your stage in the process, securing the lowest rate you qualify for is advisable.
The current average rates for a 30-year fixed mortgage are 6.65% for purchase and 6.74% for refinancing, showing a decrease of 8 basis points for purchase and 3 basis points for refinancing compared to the previous week. Rates for a 15-year mortgage are at an average of 5.89% for purchase and 6.06% for refinancing, down 9 basis points for purchase and 3 basis points for refinancing over the past week. The average rate for a 30-year fixed jumbo mortgage is 6.71%.
Here are the purchase and refinance rates for Friday, April 4, 2025:
– 30-year fixed rate: 6.65% (purchase) / 6.74% (refinance)
– 20-year fixed rate: 6.33% (purchase) / 6.48% (refinance)
– 15-year fixed rate: 5.89% (purchase) / 6.06% (refinance)
– 10-year fixed rate: 5.76% (purchase) / 6.03% (refinance)
– 30-year fixed FHA rate: 6.41%
– 30-year fixed VA rate: 6.32%
– 30-year fixed jumbo rate: 6.71%
Mortgage rates are influenced by various factors such as inflation, economic conditions, housing trends, and the Federal Reserve’s interest rate targets. Lenders also consider individual factors like credit score, down payment amount, property type, and loan terms. Due to rate fluctuations, it’s recommended to secure a mortgage rate when you are comfortable with the loan terms.
For more information on shopping for a mortgage, review the Freddie Mac weekly mortgage report, which includes the latest data on rates for different mortgage terms.
Data is released weekly on Thursdays at noon ET and includes four key factors that influence your mortgage rate. Even a small difference in your interest rate can lead to significant savings over time. Factors affecting the rate you are offered include the type of mortgage, initial payments, and your overall financial status. Your credit score plays a crucial role, with higher scores typically leading to better rates. Making a larger down payment upfront can also lead to lower interest rates and help you avoid mortgage insurance costs. The loan term you choose, such as 30 years or shorter options, can impact your interest rate and monthly payments. Additionally, you must decide between fixed-rate mortgages, offering stability, or adjustable-rate mortgages, which can change based on market conditions. Prequalification and preapproval are important steps in determining your home-buying budget. Preapproval involves a more in-depth analysis of your finances compared to prequalification. Keep in mind that changes in mortgage rates are influenced by factors like the Federal Reserve’s target interest rate, inflation, and market conditions.
On September 18, the Federal Reserve implemented a half-point cut to its federal funds target interest rate, followed by two additional quarter-point cuts after its November and December policy meetings. The Fed then paused rate cuts for a second time on March 19, 2025. During its second rate-setting policy meeting of the year, the Fed announced it would maintain the federal funds target interest rate within a range of 4.25% to 4.50%. This marked the second time the Fed had halted rate changes since making three consecutive cuts in September, November, and December, reducing the Fed rate by a full percentage point in an effort to bring the inflation rate closer to an average of 2%.
In its post-meeting statement, the Federal Reserve stated that it was keeping the target range steady to support “maximum employment” and maintain inflation at 2%. The Fed acknowledged that the unemployment rate had stabilized at a low level, and the labor market remained strong. However, it also noted an increase in uncertainty surrounding the economic outlook.
Looking ahead to the next policy meeting scheduled for May 6–7, 2025, it remains uncertain what decisions the Federal Reserve will make. Economists are closely monitoring inflation and labor reports to gauge the potential timing of future rate cuts. Recent data showed inflation moderating from previous highs, while job numbers indicated slight growth albeit below expectations. The latest economic indicators reflect challenges such as trade tensions, immigration policies, and declining consumer confidence, adding to economic uncertainty.
At a post-meeting press conference on March 19, Federal Reserve Chair Jerome Powell mentioned the Fed’s economic projections of slower growth and higher inflation. He highlighted the challenges posed by tariffs and emphasized the ongoing efforts to meet the 2% inflation target.
The Federal Reserve, led by Powell, is scheduled to make an announcement on its rate decision on Wednesday, May 7, 2025, at 2 p.m. ET. Delve deeper into the upcoming Federal Reserve meeting, expectations, and how it could impact your finances.
A recent development involves changes in NAR settlement and realtor commission practices. A judge has granted preliminary approval to a $418 million antitrust settlement with the National Association of Realtors on April 23, 2024. This settlement puts an end to the traditional real estate broker commissions of up to 6% of a home’s purchase price. Starting August 17, 2024, real estate agents must provide interested buyers with a representation agreement before showing a home. This agreement aims to bring transparency to the buyer-agent relationship, agent fees, and payment methods. While this settlement is not forecasted to affect mortgage rates, it does allow consumers to negotiate agent service fees, potentially resulting in long-term cost savings.
Explore other topics covered in our mortgage and homebuying series, including how to navigate mortgage shopping in 2025, popular mortgage loans, refinancing considerations, the impact of rate changes on your mortgage, mortgage rate locks, refinancing from an ARM to a fixed-rate mortgage, and answers to frequently asked questions about mortgage rates. Learn more about mortgages to find the best options for your budget and financial objectives. Additionally, access our collection of personal finance guides to assist you in saving, earning, and growing your wealth.
Mortgage lenders are financial institutions that provide loans to homebuyers. It’s important to differentiate lenders from loan servicers, who handle loan operations such as processing payments, communicating with borrowers, and sending monthly statements.
Refinancing a mortgage involves switching from your current mortgage to a new lender offering better terms and lower rates. The new lender pays off the existing mortgage, and you make payments to the new lender. Learn more about the refinancing process and timing in our refinancing guide.
Even if you’ve previously owned a home, you may still qualify for homebuyer assistance programs. The IRS and HUD consider you a first-time homebuyer if neither you nor your spouse has owned a primary residence within the past three years. Discover available programs for repeat homebuyers in our homebuyer assistance guide.
An adjustable-rate mortgage (ARM) is a type of home loan with a variable interest rate. Unlike a fixed-rate mortgage, which maintains a constant interest rate and payments throughout the loan term, an ARM starts with an initial fixed rate for a specified period before adjusting to a higher rate and subsequently readjusting periodically for the remainder of the loan term. For example, a 5/1 ARM has a fixed rate for five years before adjusting.
Every year or on an annual basis. Find out more about how to switch your adjustable-rate mortgage to a fixed-rate mortgage in our refinancing guide. Can I negotiate my mortgage interest rate? While it’s unlikely, lenders take into account market conditions and financial factors when setting rates. You can inquire about reducing costs in other ways when comparing mortgage lenders. For example, many lenders offer lower rates if you pay “mortgage points” upfront, which are fees paid to the lender. A mortgage point could amount to 1% of your mortgage, around $5,000 on a $500,000 loan, with each point potentially reducing your interest rate by about 0.25%, depending on the lender and loan terms. Find more details in our guide on securing the best rate for your next mortgage. What happens to my mortgage when I pass away? Unlike other debts settled through your estate, your home’s mortgage requires full payment to transfer the property title. Only those who signed for the loan are liable for the mortgage. Learn more about post-mortem mortgage procedures. I already own a home. Can I tap into my home’s equity to cover large or unforeseen expenses? Yes, leveraging your home’s value is a way to access funds for renovations, debt consolidation, or emergencies without refinancing. This approach offers lower rates while maintaining your existing mortgage terms, requiring good credit and sufficient home equity. Discover how to access your home’s equity as rates decrease. Note: Rates are accurate as of Friday, April 4, 2025, at 6 a.m. ET. APYs and promotional rates may vary by region and are subject to change. Sources: Mortgage Industry Insights, Bankrate; Primary Mortgage Market Survey, Freddie Mac; Employment Situation Summary, U.S. Bureau of Labor Statistics; Consumer Price Index Summary, U.S. Bureau of Labor Statistics; Producer Price Index News Release Summary, U.S. Bureau of Labor Statistics; CME FedWatch Tool, CME Group.
