- Mortgage rates for March 26, 2025, are up around 6.60%.
- Rates have been bumpy this month as markets react to uncertainty in the economy.
- Inflation data coming out later this week could help rates ease somewhat.
- Check your rate online and see how much house you can afford with Mortgage Research Center.
Mortgage rates have been somewhat volatile this month thanks in part to current economic uncertainty. So far this week, they've been trending slightly higher.
Last week, the Federal Reserve announced that it would continue to hold the federal funds rate steady after cutting rates three times in 2024. Investors still expect the Fed to lower rates at least a couple of times this year, which should help mortgage rates go down a bit. But this hinges on inflation continuing to slow.
Later this week, we'll get to see how inflation trended in February according to the personal consumption expenditures price index. The PCE price index is the Fed's preferred inflation gauge, and depending on how much it rose last month, we could see mortgage rates shift when the data is released.
In January, the PCE price index rose 2.5% year over year, a slight deceleration from the previous month. The Cleveland Fed's inflation nowcast estimates that this index rose 2.38% year over year in February. If this holds, rates may drop back down.
What Are Today's Mortgage Rates?
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What Are Today's Mortgage Refinance Rates?
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Mortgage Calculator
Use our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments.
Mortgage Calculator
- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
By plugging in different term lengths and interest rates, you'll see how your monthly payment could change.
Current 30-Year Mortgage Rates
Average 30-year mortgage rates are hovering around 6.60%, according to Zillow data. Rates averaged 6.51% in February.
The 30-year fixed-rate mortgage is the most popular home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms, like a 15-year mortgage.
Current 15-Year Mortgage Rates
Average 15-year mortgage rates are around 6%, according to Zillow data. In February, 15-year rates averaged 5.84%.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.
Current Mortgage Refinance Rates
Refinance rates have been similar to purchase rates recently. Last month, 30-year refinance rates averaged 6.75%, while 15-year refinance rates were around 6.04%.
How Much Do Mortgage Rates Need to Drop to Refinance?
If you're wondering if you should refinance now, you'll need to crunch the numbers to see if it makes sense. Some experts advise only refinancing if you can reduce your rate by a percentage point or more, but it really comes down to whether it works for your individual circumstances.
If you can save enough each month by refinancing that you can recoup your costs in a reasonable amount of time, it might be worth it. You can calculate this by dividing your closing costs by the amount you're saving on your monthly mortgage payment. So, if you paid $3,000 to refinance and were able to lower your monthly payment by $200, it would take you 15 months to break even on your refinance.
5-Year Mortgage Rate Trends
Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data.
What Factors Influence Mortgage Rates?
Mortgage rates are determined by a variety of different factors, including larger economic trends, Federal Reserve policy, your state's current mortgage rates, the type of loan you're getting, and your personal financial profile.
While many of these factors are out of your control, you can work on improving your credit score, paying off debt, and saving for a larger down payment to ensure you get the best rate possible.
How Does the Fed Rate Affect Mortgage Rates?
The Fed increased the federal funds rate dramatically in 2022 and 2023 to try to slow economic growth and get inflation under control. Inflation has since slowed significantly, but it's still slightly above the Fed's 2% target rate.
Mortgage rates aren't directly affected by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect Fed policy to affect the broader economy.
Fed policymakers lowered the federal funds rate three times last year, and they may cut a couple more times in 2025. So we could see mortgage rates drop a bit this year, but they may not go down enough to substantially improve affordability.
When Will Mortgage Rates Go Down?
Most major forecasts expect mortgage rates to go down slightly this year, but they may not drop a lot in the near term.
How much rates go down depends on how the economy evolves. If inflation shows signs that it's slowing down to the Fed's 2% target, mortgage rates may ease a little bit later this year. But in the near term, rates may remain near their current levels.
Will Home Prices Drop in 2025?
We aren't likely to see home prices drop anytime soon thanks to extremely limited supply. But the good news is that price growth is likely to moderate in 2025.
Fannie Mae researchers expect prices to increase 3.5% in 2025, a slowdown from this year's pace, while the Mortgage Bankers Association expects a 1.3% increase in 2025.
How to Choose a Mortgage
You have a lot of options when it comes to finding the right type of mortgage for you. First, you'll need to decide if you want a fixed-rate mortgage or an adjustable-rate mortgage.
Fixed-rate mortgages lock in your rate for the entire life of your loan. Adjustable-rate mortgages lock in your rate for the first few years, then your rate can go up or down periodically based on market conditions.
Fixed-Rate vs. Adjustable-Rate Mortgage Pros and Cons
How do you choose between a fixed-rate vs. adjustable-rate mortgage?
ARMs often (but not always) start with lower rates than fixed-rate mortgages, but ARM rates change once your fixed-rate introductory period is over. If you plan on moving or refinancing before the rate adjusts, an ARM could be a good deal. But keep in mind that a change in circumstances could prevent you from doing these things, so it's a good idea to think about whether your budget could handle a higher monthly payment.
Fixed-rate mortgages are a good choice for borrowers who want stability, since your monthly principal and interest payments won't change throughout the life of the loan (though your mortgage payment could increase if your taxes or insurance go up).
But in exchange for this stability, you may get a higher rate. This might seem like a bad deal right now, but if rates increase further down the road, you might be glad to have a rate locked in. And if rates trend down, you may be able to refinance to snag a lower rate.
Conventional vs. Government-Backed Mortgages
Conventional mortgages are home loans that aren't backed by a government agency. They're often a good option for borrowers with strong credit scores. Conventional loans allow down payments as low as 3%, though putting at least 20% down will allow you to avoid paying for private mortgage insurance.
The main types of government-backed mortgages are:
- FHA loans: Allow credit scores down to 580 and 3.5% down payments
- VA loans: Require no down payment, but are only available to veterans and military members who meet minimum service requirements
- USDA loans: Also allow 0% down for low-to-middle income borrowers who live in an eligible rural or suburban area
Government-backed mortgages are often a good choice for borrowers with low credit scores, first-time homebuyers, or those who don't have a lot of money saved for a down payment. They also typically have lower mortgage rates compared to conventional loans.
Choosing a Term Length
You'll also need to decide what term length you want. Your mortgage term is how long you have to pay back the loan. Most borrowers get a 30-year term, since it's the longest term available and results in the lowest monthly payment.
Shorter terms, like a 15-year mortgage, can be a good option if you're looking to save money on interest. But because you're paying off the loan in half the amount of time you have with a 30-year mortgage, your monthly payments will be much higher.
