30-Year Fixed-Rate Mortgage Refinance Rate Stands at 6.89%

On July 21, 2025, the average refinance rate for a 30-year, fixed-rate home loan stood at 6.89%. This data, sourced from a popular real estate marketplace, provides a snapshot of the current mortgage refinance landscape. For homeowners considering refinancing, various loan types and terms are available, each with its own interest rate. Conventional mortgages, for instance, have rates ranging from 6.86% for a 20-year term to 5.95% for a 15-year term. Jumbo mortgages, which are larger loans, have rates of 7.57% for a 30-year term and 7.24% for a 15-year term. FHA loans, designed for borrowers with lower credit scores, offer rates of 6.65% for a 30-year term and 5.63% for a 15-year term. VA loans, available to veterans and their families, have rates of 6.58% for a 30-year term and 5.85% for a 15-year term.

Mortgage refinancing involves replacing an existing home loan with a new one, a process that requires meeting lender criteria similar to those for an initial mortgage application. This includes credit profile, proof of income, and debt-to-income ratio. A hard inquiry on the credit score is likely, and there is a possibility of being denied if the lender's requirements are not met. Some observers had hoped that mortgage interest rates would decrease in line with the Federal Reserve's cuts to the federal funds rate late last year. However, this did not occur, and rates remained near the 7% mark for months. Although rates dipped slightly toward the end of February, they are still well above the pandemic-era lows, when some homeowners secured loans with rates in the 2% and 3% range. Many homeowners remain locked into their current rates, unwilling to refinance in the current environment. A report showed that as of the third quarter of 2024, 82.8% of homeowners with a mortgage had a rate below 6%.

Refinancing a mortgage can make sense under certain conditions. One common guideline is that if a new rate is a full percentage point lower than the current rate, it is worth refinancing. For example, someone with a 7% home loan might find it beneficial to refinance if rates drop to 6%. Refinancing can also be used to tap into home equity through a cash-out refi, which typically requires at least 20% equity in the home. Another situation where refinancing might be beneficial is to change the loan term, such as switching from a 15-year mortgage to a 30-year mortgage to reduce monthly payments. Additionally, switching loan types, such as from an FHA loan to a conventional loan, can provide opportunities to eliminate mortgage insurance costs. Refinancing from an adjustable-rate mortgage to a fixed-rate mortgage can also be a smart move to avoid future rate hikes.

Refinancing a mortgage involves closing costs that typically range from 2% to 6% of the loan amount. For a $300,000 loan, this could amount to $6,000 to $18,000. These costs include lender origination fees, appraisal fees, title search and insurance fees, loan application fees, survey fees, attorney fees, recording fees, and prepayment penalties. There are various types of mortgage refinance loans available, each serving different purposes. A rate-and-term refinance allows for a lower interest rate and/or a shorter loan term. A cash-out refinance enables homeowners to tap into their home's equity. A no-closing-cost refinance covers closing costs in exchange for a higher interest rate. Streamline refinance options are available for existing FHA, VA, and USDA loan borrowers, offering a more straightforward application process.

Homeowners are not required to refinance with their original lender and should shop around for the best rates and services. Some lenders may offer incentives for sticking with them, such as waiving a portion of the closing costs. This can make refinancing more accessible and reduce the upfront costs. Additionally, homeowners whose mortgages were purchased by certain entities might be eligible for specific refinance programs.