As of Monday, March 31, 2025, average mortgage rates are on the rise, with the 30-year fixed rate starting the week at 6.75%, which is 30 basis points lower than the beginning of the year. A new jobs report set to be released on Friday will provide insights into the effects of government job cuts and increasing inflation on March’s hiring numbers, amid a significant decline in consumer confidence. Federal Reserve Chair Jerome Powell is scheduled to discuss the U.S. economic outlook on the same day in Arlington, Virginia, along with other key Fed officials later in the day.
The current average rates for a 30-year fixed mortgage are 6.75% for purchase and 6.82% for refinance, showing an increase of 7 basis points from 6.68% for purchase and 21 basis points from 6.61% for refinance at the start of last week. Rates for a 15-year mortgage now sit at an average of 6.02% for purchase and 6.15% for refinance, up 11 basis points from 5.91% for purchase and 27 basis points from 5.88% for refinance compared to the previous week. Additionally, the average purchase rate for a 30-year fixed jumbo mortgage is 6.75%.
For those in the market for a home during the busy spring season, it’s a good time to explore mortgage options across conventional, FHA, VA, and other popular loan types.
Key Mortgage Rates as of Monday, March 31, 2025:
– 30-year fixed rate: 6.75%
– 20-year fixed rate: 6.50%
– 15-year fixed rate: 6.02%
– 10-year fixed rate: 5.89%
– 30-year fixed FHA rate: 6.78%
– 30-year fixed VA rate: 6.84%
– 30-year fixed jumbo rate: 6.75%
Source: Bankrate lender survey
Mortgage rates are influenced by various factors such as inflation, economic conditions, housing market trends, and the Federal Reserve’s target interest rate. Lenders also consider individual credit scores, available down payment amounts, property details, and other loan terms like the duration (e.g., 30-year or 15-year).
As rates can change daily, it’s advisable to secure a mortgage rate when you are satisfied with the overall terms of your loan.
For a more detailed guide on mortgage shopping in 2025, refer to: [Link to shopping guide]
Freddie Mac’s Weekly Mortgage Report indicates a slight decrease in the average 30-year fixed rate to 6.65% from last week’s 6.67%, as reported in the March 27, 2025 Prime Mortgage Market Survey featuring data from lenders nationwide.
The terms of your mortgage and the interest rate you are offered depend on several factors including the type of mortgage you are interested in, the upfront payments you are willing to make, and your overall financial health, including your credit score. Lenders typically offer the best rates to borrowers with good to excellent credit scores, usually a FICO score of at least 670. However, even with fair credit, you may still find a mortgage with decent rates.
A higher down payment can benefit you by lowering your interest rate. Putting down at least 20% of the home’s purchase price upfront can result in a lower interest rate and can help you avoid mortgage insurance, ultimately reducing your total costs.
There are different loan terms available, such as 30-year, 20-year, 15-year, and 10-year mortgages. Shorter loan terms usually come with lower interest rates but higher monthly payments. Longer terms may have smaller monthly payments but result in higher total interest paid over the life of the loan.
Mortgage rates can be fixed or variable. Fixed-rate mortgages offer a consistent interest rate throughout the loan term, while adjustable-rate mortgages (ARMs) start with a lower fixed rate for a set period and then adjust to a variable rate based on market conditions. Your choice between these rates should align with your financial goals and risk tolerance.
Prequalification and preapproval are processes to determine how much house you can afford, with preapproval involving a deeper financial analysis compared to prequalification. Understanding these steps in the homebuying process is crucial.
Mortgage rates are influenced by the benchmark federal funds target interest rate set by the Federal Reserve. While mortgage rates do not directly follow the Fed rate, they are impacted by similar factors, such as inflation. Recent Fed rate adjustments have led to changes in mortgage rates, impacting borrowers and the overall housing market.
At the conclusion of its second rate-setting policy meeting of the year on March 19, 2025, the Federal Reserve announced that it would maintain the federal funds target interest rate within a range of 4.25% to 4.50%. This decision represents the second instance in which the Fed has refrained from adjusting the rate following three consecutive cuts in September, November, and December of the previous year, which had collectively reduced the rate by a full percentage point. The Fed’s primary objective remains anchoring inflation closer to the desired 2% target.
In its post-meeting statement, the Federal Reserve reiterated its commitment to fostering “maximum employment” and ensuring that inflation hovers around the 2% mark. The statement acknowledged the stability of the unemployment rate in recent months and emphasized the robust conditions in the labor market. However, it also noted an escalation in economic uncertainties.
Looking ahead, the Fed emphasized the importance of monitoring incoming data, assessing the evolving economic landscape, and evaluating risk factors in determining the timing and extent of any future adjustments to the interest rate. Economic projections released by the Fed suggest a plan for two quarter-point rate cuts in 2025, reflecting concerns about anticipated slower growth and rising inflation in the future.
The next policy meeting of the Federal Reserve is scheduled for May 6–7, 2025, and the outcome remains uncertain. Analysts are closely monitoring inflation trends and labor market indicators to gauge the potential timing of future rate adjustments. Recent reports have shown a moderation in inflation rates from previous peaks, with employment data indicating a slight rise in unemployment and lower-than-expected job additions.
The Federal Reserve Chair, Jerome Powell, highlighted the Fed’s economic outlook during a post-meeting press conference, underscoring the challenges posed by slower growth and higher inflation. Powell mentioned the impact of tariffs on inflation and emphasized the need to differentiate between tariff-related inflation and other economic factors.
The upcoming rate decision announcement is scheduled for Wednesday, May 7, 2025, at 2 p.m. ET. Stay informed about the Federal Reserve’s future meetings and economic developments for deeper insights into the evolving financial landscape.
Antitrust settlement and changes to realtor commissions
On April 23, 2024, a judge granted preliminary approval to a $418 million antitrust settlement with the National Association of Realtors, marking the end of customary real estate broker commissions of up to 6% of a home’s purchase price. As of August 17, 2024, new regulations require real estate agents to provide interested buyers with a representation agreement before touring a home. This agreement aims to enhance transparency in the buyer-agent relationship, detailing the agent’s fees and payment structure. While the settlement is not anticipated to impact mortgage rates, it empowers consumers to negotiate the costs of agent services, potentially leading to savings in the long term.
Other topics in our mortgages and homebuying series include:
– A guide for homebuyers in 2025 on shopping for mortgages
– Overview of popular mortgage loans: Conventional, FHA, VA, and jumbo loans
– Factors to consider when refinancing your mortgage
– Understanding the impact of a 1% rate change on your mortgage
– Explaining mortgage rate lock and its significance
– Transitioning from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage
– FAQs on mortgage rates and how they affect your financial planning
For a comprehensive understanding of mortgages tailored to your budget and financial objectives, explore our collection of personal finance guides that offer money-saving tips, income generation strategies, and wealth-building advice.
Key mortgage terms explained:
– Mortgage lenders: Institutions that provide loans to homebuyers, distinct from loan servicers handling loan management tasks.
– Refinancing a mortgage: Swapping your existing mortgage for a new one with better terms and lower rates, often resulting in savings.
– Eligibility for homebuyer assistance: Programs available to first-time buyers or those who haven’t owned a principal residence in the past three years.
– Adjustable-rate mortgage (ARM): A home loan with a variable rate that adjusts periodically after an initial fixed-rate period.
– Negotiating mortgage rates: While challenging, there may be opportunities to discuss rates with lenders based on market conditions.
Consider different factors, including financial circumstances, when determining mortgage rates. You can explore ways to reduce costs by comparing lenders and understanding options like mortgage points, where upfront fees can lower your interest rate. For example, paying 1% of your mortgage amount as a mortgage point could save you money in the long run. It’s important to plan for what happens to your mortgage after your passing, as mortgages are typically not transferable. You can also leverage your home’s equity to finance major expenses without refinancing, provided you have good credit and built enough equity. Keep in mind that rates can vary, so it’s essential to stay informed with updated information from reliable sources.
