Average mortgage rates on 30-year fixed terms have dropped below 7.00% as of Friday, March 21, 2025, with 15-year fixed terms hovering around 5.90%. This shift follows the Federal Reserve’s decision to hold off on cutting benchmark interest rates, keeping the Fed rate steady in a range of 4.25% to 4.50%. Economic forecasts now suggest two cuts may occur in 2025. The Mortgage Bankers Association notes “significant uncertainty” in the Fed’s outlook, projecting borrowing costs to remain between 6.5% to 7% during the peak spring homebuying season. With rates currently at a three-month low, it’s a prime opportunity to explore mortgage options and secure the best rate available.
The latest average rates show a 30-year fixed mortgage at 6.68% for purchase and 6.61% for refinance. Rates for a 15-year mortgage are averaging 5.91% for purchase and 5.88% for refinance. Additionally, the average rate for a 30-year fixed jumbo mortgage stands at 6.75%. To find the lowest mortgage rate tailored to your needs, explore the options provided below.
– 30-year fixed rate: 6.68%
– 20-year fixed rate: 6.28%
– 15-year fixed rate: 5.91%
– 10-year fixed rate: 5.70%
– 5/1 adjustable rate mortgage: 5.95%
– 10/1 adjustable rate mortgage: 6.59%
– 30-year fixed FHA rate: 6.45%
– 30-year fixed VA rate: 6.46%
– 30-year fixed jumbo rate: 6.75%
**Refinance Rates for Friday, March 21, 2025:**
– 30-year fixed rate: 6.61%
– 20-year fixed rate: 6.27%
– 15-year fixed rate: 5.88%
– 10-year fixed rate: 5.71%
– 5/1 adjustable rate mortgage: 5.91%
– 10/1 adjustable rate mortgage: 6.61%
– 30-year fixed FHA rate: 6.50%
– 30-year fixed VA rate: 6.19%
– 30-year fixed jumbo rate: 6.69%
These rates are subject to change due to various factors, including economic conditions and Federal Reserve policies. When considering a mortgage, it’s crucial to evaluate your financial position, credit score, down payment amount, and property details.
For more information on how to secure the best mortgage rate and navigate the homebuying process in 2025, refer to the resources provided below:
– “6 ways to get the lowest rate on your next mortgage
Saving even just one percentage point on your interest rate can lead to savings of hundreds of dollars per month and thousands of dollars over the course of your mortgage. However, the rate you are offered depends on various factors such as the type of mortgage you are interested in, the upfront payments you are willing to make, and your overall financial health.
Your credit score plays a significant role in the mortgage rates you are eligible for. Borrowers with good to excellent credit scores, typically at least 670 on the FICO scale, are more likely to secure the best rates. Even with fair credit, it is possible to find decent mortgage options.
Making a larger down payment can also positively impact your interest rate. Putting down at least 20% of the purchase price upfront can result in a lower rate and help you avoid additional costs like mortgage insurance.
The term of your loan is another important consideration. While a 30-year mortgage is common, shorter loan terms such as 20, 15, or 10 years may offer lower interest rates but higher monthly payments. Long-term mortgages can lead to lower monthly payments but higher overall interest costs.
You will also need to decide between a fixed-rate mortgage, which maintains a consistent interest rate throughout the loan term, and an adjustable-rate mortgage (ARM), which begins 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 essential. Prequalification provides a general idea of how much you may be able to borrow based on basic information, while preapproval involves a more thorough examination of your finances to give you a precise loan estimate.
Mortgage rates are influenced by various factors, including the federal funds target interest rate set by the Federal Reserve. Changes in the Fed rate can impact rates on deposit accounts, loans, and mortgages. Following a series of rate hikes to combat high inflation, the Federal Reserve announced a half-point rate cut in September.
March 19, 2025: Fed Holds Steady on Interest Rates
Following a series of rate cuts in September, November, and December, the Federal Reserve opted to maintain the federal funds target interest rate at a range of 4.25% to 4.50% after its second policy meeting of the year on March 19, 2025. This marks the second time the Fed has paused a rate change as it aims to bring inflation closer to its target of 2%.
In its post-meeting statement, the Federal Reserve highlighted its commitment to achieving “maximum employment” and managing inflation at 2%. The statement acknowledged the stability of the unemployment rate and solid labor market conditions while also noting increased economic uncertainty.
Looking ahead, the Fed plans to carefully assess incoming data and the evolving economic outlook before making any further adjustments to interest rates. Economic projections suggest the possibility of two quarter-point cuts in 2025, reflecting expectations of slower growth and higher inflation on the horizon.
The next Federal Reserve policy meeting is scheduled for May 6–7, 2025, where decisions regarding interest rates will be made. Economists are closely watching inflation and labor reports to gauge the timing of potential rate cuts, particularly in light of recent economic data showing varying levels of inflation and employment trends.
Federal Reserve Chair Jerome Powell emphasized the need to navigate economic challenges, such as tariffs impacting inflation, during a press conference following the March meeting. The Fed’s goal of reaching 2% inflation remains a key focus as they work to address economic uncertainties and maintain stability.
Stay tuned for the latest updates following the Fed’s upcoming meeting in May.
Federal Reserve Meeting Schedule and Financial Impact Updates
Stay informed on the next Federal Reserve meeting and its implications for your finances. Plus, changes to NAR settlement and realtor commissions.
A significant antitrust settlement with the National Association of Realtors has been approved by a judge on April 23, 2024, totaling $418 million. This settlement marks the end of traditional real estate broker commissions, which could be as high as 6% of a home’s purchase price. Starting from August 17, 2024, real estate agents must provide interested buyers with a representation agreement before showing them a property. This agreement aims to bring transparency to the buyer-agent relationship, including details on agent fees and payment methods. While this settlement is not expected to impact mortgage rates directly, it does empower consumers to negotiate agent fees, potentially saving them money in the long run.
Explore more topics in our homebuying series:
– A comprehensive guide on shopping for a mortgage in 2025
– Determining the right time to refinance your mortgage
– Understanding the impact of a 1% rate change on your mortgage
– Unlocking the concept of a mortgage rate lock
– Transitioning from an ARM to a fixed-rate mortgage
– FAQs on mortgage rates and how they affect your financial decisions
Discover the basics of mortgage lending:
Lenders are financial institutions that provide homebuyers with loans, distinct from loan servicers who manage loan operations, payments, and communication with borrowers.
Learn about refinancing your mortgage:
Refinancing involves replacing your current mortgage with a new one offering better terms and lower rates. The new lender pays off your existing mortgage, and you make payments to the new lender.
Eligibility for homebuyer assistance:
Even if you’ve previously owned a home, you may still qualify for homebuyer assistance programs, as long as you haven’t owned a primary residence in the past three years.
Understanding adjustable-rate mortgages (ARMs):
An ARM features a variable interest rate, unlike a fixed-rate mortgage with a constant rate. Initial fixed-rate periods typically last for three years before adjustments occur periodically.
Negotiating your mortgage rate:
While negotiating your mortgage rate might not be common, lenders consider market conditions and financial factors when determining rates.
When comparing mortgage lenders, remember that you can explore various ways to reduce costs aside from simply looking at rates. Some lenders may offer lower rates if you pay upfront fees known as “mortgage points,” which typically cost around 1% of your mortgage amount. For example, on a $500,000 home loan, a mortgage point could be about $5,000 and could decrease your interest rate by approximately 0.25%, depending on your lender and loan terms. To learn more about securing the best rate for your next mortgage, refer to our comprehensive guide on the topic.
Concerned about what happens to your mortgage after your passing? Unlike other debts that are typically settled through your estate, mortgages are not usually transferable, requiring the property to be fully paid off to transfer the title. Only those who are signatories on the loan are typically responsible for the mortgage debt. Discover more about handling mortgages after death.
If you already own a home, you may consider leveraging your home’s equity to cover significant or unforeseen expenses. Whether it’s for home improvements, consolidating high-interest debts, or addressing emergencies, tapping into your home’s value can offer access to lower rates without the need to refinance and risking your existing low-rate mortgage. Generally, this option requires a strong credit score and sufficient equity in your property. Learn how you can access your home equity as interest rates decrease.
Please note that the rates mentioned were accurate as of Friday, March 21, 2025, at 6:15 a.m. ET. Keep in mind that APYs and promotional rates can vary by region and are subject to change. For more information, refer to reputable sources such as Bankrate’s Mortgage Industry Insights, Freddie Mac’s Primary Mortgage Market Survey, and data from the U.S. Bureau of Labor Statistics on employment and inflation indices.
