Average mortgage rates are slightly decreasing as of Wednesday, June 18, 2025, in anticipation of the Federal Reserve’s policy session later today. The Fed is expected to maintain the federal funds target rate for the fourth consecutive time this year. Since last September when the Fed initiated consecutive rate cuts, mortgage rates have remained elevated, about 70 basis points higher. Mortgage rates are influenced by various factors such as inflation, employment, the bond market, and the economy’s overall health, including uncertainties surrounding the U.S. economy and the evolving trade agenda under the current administration.
For potential homebuyers looking to purchase a home this summer, now is an ideal time to start shopping for a mortgage. It is advisable to compare quotes from different lenders offering conventional, FHA, VA, and other popular home loans to secure the lowest rate available to protect against any future changes in interest rates.
According to the latest data from Bankrate, the current average interest rate for a 30-year fixed mortgage stands at 6.86% for purchases and 6.88% for refinancing. This marks a slight decrease from the previous week’s rates. The average rates for a 15-year fixed mortgage are 6.08% for purchases and 6.15% for refinancing, also showing a decrease compared to the previous week. Additionally, the average rate for a 30-year fixed jumbo mortgage is 6.87%.
Mortgage rates are influenced by several factors including inflation, economic conditions, housing market trends, and the Federal Reserve’s policies. Lenders also consider individual factors such as credit score, down payment amount, property type, and loan terms when determining mortgage rates.
Given the daily fluctuations in rates, it is advisable to secure a mortgage rate when you are satisfied with the terms and conditions of your loan. Keeping track of mortgage rate trends and staying informed can help you make informed decisions when purchasing a home.
Mac updates its Prime Mortgage Market Survey data every Thursday at noon ET. There are four key factors that can impact your mortgage rate. Even a small difference of just half a percentage point in your interest rate could save you hundreds of dollars each month and thousands over the life of your mortgage. Your final mortgage rate is determined by the specific mortgage you are interested in, the upfront payments you are willing to make, and your overall financial health.
1. Your credit score plays a significant role in the mortgage rate you are offered. Borrowers with good to excellent credit scores, typically at least 670, are likely to secure the best mortgage rates. However, even with fair credit, you may still find lenders offering decent rates.
2. The size of your down payment affects your interest rate. Putting down at least 20% of the home’s purchase price upfront usually results in a lower interest rate and allows you to avoid mortgage insurance, reducing your overall costs.
3. The loan term you choose is important. While the 30-year mortgage is common, shorter loan terms like 20, 15, or 10 years often come with lower interest rates but higher monthly payments. Longer terms may have lower monthly payments but result in higher total interest paid over the loan’s life.
4. Consider the type of interest rate. Fixed-rate mortgages offer a consistent rate for the entire loan term, while adjustable-rate mortgages (ARMs) start with a fixed rate that later adjusts based on market conditions. Your choice between the two depends on your financial goals and risk tolerance.
Understanding the difference between prequalification and preapproval is essential. Prequalification provides a preliminary estimate based on basic information, while preapproval involves a more thorough review of your finances to give you a precise lending estimate.
Keep an eye on mortgage rates, which are influenced by the benchmark federal funds target interest rate set by the Federal Reserve. While mortgage rates do not directly mirror the Fed rate, they are impacted by similar factors, particularly inflation. As the Fed rate rises, mortgage rates tend to increase as well.
The Federal Reserve made a highly anticipated half-point cut to its federal funds target interest rate on September 18. Subsequent quarter-point cuts were announced after its November and December policy meetings. Learn more about how the Federal Reserve impacts various financial aspects, such as savings, student loans, and mortgage rates.
On May 7, 2025, the Fed paused its rate cuts for the third consecutive time, maintaining the federal funds target interest rate unchanged at 4.25% to 4.50%. This decision came after three cuts in 2024, including a half-point cut in September followed by quarter-point cuts in November and December. The Fed’s post-meeting statement highlighted efforts to achieve “maximum employment” and maintain inflation at 2%.
The Fed’s projections for 2025 were adjusted to predict only two quarter-point cuts, reflecting expectations of slower growth and higher inflation. At the upcoming policy meeting on June 17–18, 2025, the Federal Reserve is expected to keep rates steady based on market predictions. Analysts are closely monitoring inflation and labor reports to gauge the timing of future rate adjustments.
Recent economic data indicated stable unemployment rates and moderate inflation increases. Federal Reserve Chair Jerome Powell warned of potential challenges due to supply shocks impacting the economy. The Fed will announce its rate decision on June 18, 2025, with a focus on addressing evolving economic conditions. Find out more about the impact of Federal Reserve meetings on your finances and explore other topics related to mortgages and homebuying.
Mortgage Options for Homebuyers: Conventional, FHA, VA, and Jumbo Loans
Wondering when to refinance your mortgage or what a mortgage rate lock is? Learn about refinancing an adjustable-rate mortgage into a fixed-rate one, and get answers to common questions about mortgage rates. Discover more about mortgages to find the best fit for your budget and financial goals, and explore our personal finance guides to help you save, earn, and grow your wealth.
Understanding Mortgage Lenders
Mortgage lenders are financial institutions that provide homebuyers with loans. They differ from loan servicers, who handle tasks such as processing payments and communicating with borrowers. Refinancing a mortgage involves switching your current loan to a new lender for better terms and lower rates. Find out more about this process in our refinancing guide.
Qualifying for Homebuyer Assistance
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 principal residence in the last three years. Learn about available programs in our homebuyer assistance guide.
Understanding Adjustable-Rate Mortgages
An adjustable-rate mortgage (ARM) features a variable interest rate, unlike a fixed-rate mortgage with a consistent rate throughout the loan term. ARMs start with a fixed rate for a specified period before adjusting to a higher rate periodically. Learn about converting your ARM to a fixed-rate mortgage in our refinancing guide.
Negotiating Mortgage Rates
While negotiating your mortgage rate might be challenging, you can inquire about reducing costs through other means. Some lenders offer lower rates in exchange for upfront fees known as mortgage points. Each point typically lowers your interest rate by around 0.25%. Explore strategies for securing the best rate in our mortgage rate guide.
Managing Your Mortgage After Death
Unlike other debts settled through your estate, mortgages are not typically transferable. This means the property must be paid off entirely to transfer the title. Only those who signed the loan agreement are typically held responsible for the mortgage after your passing.
Explore what happens to your mortgage after passing away and discover how you can utilize your home’s equity for unexpected expenses. Whether you need funds for home improvements, debt consolidation, or emergencies, leveraging the value of your property can provide lower interest rates without the need to refinance or lose your current favorable mortgage terms. To access your home equity, ensure you have a solid credit score and have accumulated enough equity in your home. Stay informed about extracting equity from your property as interest rates decrease. Please note that the information provided was accurate as of Wednesday, June 18, 2025, at 6 a.m. ET, and rates may vary by location. Sources for this information include Bankrate’s Mortgage Industry Insights, Freddie Mac’s Primary Mortgage Market Survey, the U.S. Bureau of Labor Statistics’ Employment Situation Summary and Consumer Price Index Summary, as well as the U.S. Bureau of Labor Statistics’ Producer Price Index News Release summary and CME Group’s CME FedWatch Tool.
