The Federal Reserve’s fourth two-day policy session of the year took place on Tuesday, June 17, 2025, causing a slight increase in average mortgage rates. It is widely anticipated that the Fed will maintain the federal funds target rate between 4.25% to 4.50%, as indicated by CME FedWatch. Although this decision may not directly impact mortgage rates, borrowers should be aware of potential fluctuations influenced by economic conditions. Despite ongoing uncertainties surrounding inflation and the economy, the average 30-year fixed mortgage rate has remained elevated since the beginning of the year.
If you are considering purchasing a home this summer, it is advisable to explore various mortgage options and secure the lowest eligible rate. The current average rates for a 30-year fixed mortgage stand at 6.93% for purchase and 6.89% for refinancing. Additionally, rates for 15-year mortgages are at an average of 6.10% for purchase and 6.19% for refinancing. The average rate for a 30-year fixed jumbo mortgage is 6.97%.
Mortgage rates are influenced by factors such as inflation, economic trends, housing market conditions, and the Federal Reserve’s target interest rate. Lenders also consider individual credit scores, down payment amounts, property details, and other loan terms when determining rates. To capitalize on favorable conditions, it is recommended to lock in a mortgage rate once you are satisfied with the terms.
Freddie Mac’s weekly Prime Mortgage Market Survey revealed that the average rates for a 30-year fixed-rate mortgage and a 15-year mortgage were 6.84% and 5.97%, respectively. These figures reflect a slight decrease compared to the previous week and lower rates from a year ago. Freddie Mac’s chief economist, Sam Khater, noted that stable rates, improved inventory, and moderated house price growth offer positive signs during National Homeownership Month.
Weekly on Thursdays at noon ET, ac updates its Prime Mortgage Market Survey data. There are four key factors that influence your mortgage rate. A mere half a percentage point difference in your interest rate can result in significant savings each month and over the duration of your mortgage. However, the mortgage rate you’re offered is contingent upon the type of mortgage you seek, the upfront payments you are prepared to make, and your overall financial well-being.
1. **Your Credit Score**: Understanding your credit score can aid you in identifying lenders likely to approve your application and determining the appropriate mortgage for your income and lifestyle. Typically, the most favorable mortgage rates are extended to individuals with good to excellent credit scores, generally a FICO score of at least 670. Nevertheless, individuals with fair credit may still qualify for mortgages with reasonable rates.
2. **Your Down Payment**: Making a larger down payment on your home leads to better interest rates. Paying at least 20% of the purchase price upfront usually results in decreased interest rates and the avoidance of mortgage insurance, which ultimately lowers your overall expenses.
3. **Your Loan Term**: While a 30-year mortgage is a popular choice among Americans, shorter terms such as 20, 15, or even 10 years can be advantageous. Shorter terms typically come with lower interest rates but higher monthly payments. Conversely, longer terms may have lower monthly payments but result in more interest paid over the life of the loan.
4. **Interest Rate Type**: Mortgages come in two main types: fixed and variable rates. Fixed-rate mortgages offer a stable interest rate throughout the loan term, while adjustable-rate mortgages (ARMs) provide an initially lower fixed rate that later shifts to a variable rate based on market conditions. Your choice between the two depends on your financial objectives and risk tolerance.
Understanding the distinction between prequalification and preapproval is crucial. Prequalification offers a preliminary estimate of your borrowing capacity based on fundamental information, while preapproval involves a thorough analysis of your financial situation to provide a precise loan amount. For more information on these essential steps in the homebuying process, refer to our comprehensive guide on prequalification and preapproval.
For further insights on the impact of mortgage rate changes, stay informed with our resources on mortgage rates and the latest updates in the industry. Mortgage lenders closely monitor the benchmark federal funds target interest rate established by the Federal Reserve. Despite not directly mirroring the Fed rate, mortgage rates reflect similar factors considered by the Federal Reserve, especially inflation. Consequently, as the Fed rate rises, mortgage rates tend to follow suit.
In recent efforts to combat the highest inflation levels in four decades following the pandemic, the Federal Reserve raised the target interest rate 11 times between March 2022 and July 2023.
On September 18, the Federal Reserve announced a long-awaited 0.5% cut to its federal funds target interest rate, followed by two additional 0.25% cuts after its November and December meetings. Learn more about how the Federal Reserve impacts your finances, savings, student loans, and mortgage rates.
On May 7, 2025, the Fed paused rate cuts for the third time in a row. The federal funds target interest rate remained unchanged at 4.25% to 4.50% after three cuts in 2024, including a significant 0.5% cut in September 2024, followed by 0.25% cuts in November and December.
During its May 7 meeting, the Federal Reserve stated that it was maintaining the target range to achieve “maximum employment” and control inflation at 2%. The Fed noted stable unemployment rates and solid labor market conditions, acknowledging increased economic uncertainty.
Looking ahead, the Fed plans to carefully assess incoming data and the evolving economic outlook when considering future adjustments. Following the March meeting, the Fed revised its rate projections to anticipate two 0.25% cuts in 2025 due to projected slower growth and higher inflation.
The upcoming Federal Reserve policy meeting is scheduled for June 17–18, 2025. Market expectations suggest the Fed will maintain rates at 4.25% to 4.50%, with over a 95% likelihood of no rate changes according to the CME FedWatch Tool.
Economists are closely monitoring inflation and labor reports, anticipating future adjustments to the Fed rate. Recent data indicates inflation rates ranging between 2.5% and 4% since May 2023, following a peak of 9.1% in June 2022.
New job data released on June 6 showed employers adding 139,000 jobs in May, slightly surpassing projections but lower than the revised April figure of 147,000 added roles. Unemployment remained steady at 4.2%.
Annual inflation rose to 2.4% in May from 2.3% in April, with a 0.1% increase in overall prices for May. Economists warned of potential impacts from tariff policies later in the year. Wholesale prices rose by 0.1% in May, bringing the year-over-year increase to 2.6%.
Federal Reserve Chair Jerome Powell cautioned of future inflation challenges due to potential supply shocks, emphasizing the difficulties this may pose to the economy and central banks. The rate-setting panel led by Powell will announce its decision on June 18, 2025, at 2 p.m. ET.
For more information on the upcoming Federal Reserve meeting and its impact on finances, explore further resources and stories on mortgages, homebuying, and how to shop for a mortgage in 2025.
Popular home mortgage options include Conventional, FHA, VA, and jumbo loans. Wondering when to refinance your mortgage? Curious about mortgage rate locks? Learn how to refinance your adjustable-rate mortgage into a fixed-rate one and explore frequently asked questions about mortgage rates. Find out more about mortgages to best suit your budget and financial goals. Check out our personal finance guides to help you save money, earn money, and grow your wealth.
Mortgage lenders are financial institutions that lend money to homebuyers, different from loan servicers who handle operational loan tasks. Refinancing a mortgage involves switching your current mortgage to a new lender for better terms and lower rates. Discover more about the refinancing process in our refinancing guide.
If you’ve previously owned a home, you may still qualify for homebuyer assistance. Despite many programs being for first-time buyers, the IRS and HUD classify you as a first-time homebuyer if you haven’t owned a principal residence in the past three years. Find out more about available programs in our homebuyer assistance guide.
An adjustable-rate mortgage (ARM) has a variable rate unlike a fixed-rate mortgage. After an initial fixed-rate period, an ARM adjusts to a higher rate periodically. Learn about converting your ARM to a fixed-rate mortgage in our refinancing guide.
While negotiating mortgage rates is unlikely, you can inquire about reducing costs in other ways when comparing lenders. Many lenders offer lower rates for “mortgage points,” upfront fees that lower interest rates. Learn more in our guide to securing the lowest mortgage rate.
Upon your passing, your mortgage is handled differently from other debts and must typically be paid off in full for the property title to transfer. Only those who signed the loan are usually held liable.
Are you interested in learning more about how your mortgage is handled after your passing? If you already own a home, you may be wondering if you can leverage your home’s equity to cover major expenses. Whether you need funds for home improvements, debt consolidation, or unexpected emergencies, accessing your home’s equity can provide lower interest rates without the need to refinance your existing mortgage. To qualify, you typically need a good to excellent credit score and have built up enough equity in your home. Discover how you can tap into your home’s equity as interest rates decrease.
Please note that the rates mentioned were accurate as of Tuesday, June 17, 2025, at 6 a.m. ET. Rates and promotions may vary by location and are subject to change. For further information, you can refer to reliable sources such as Mortgage Industry Insights from Bankrate, the Primary Mortgage Market Survey by Freddie Mac, and economic reports from the U.S. Bureau of Labor and Statistics.
