30-Year Fixed-Rate Mortgage Refinance Rates Hold Near 7% Despite Fed Cuts

On July 22, 2025, the average refinance rate for a 30-year, fixed-rate home loan stood at 6.85%. 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 6.87% for a 20-year term to 5.87% for a 15-year term. Jumbo mortgages, which are larger than conventional loans, have rates of 6.95% for a 30-year term and 5.65% for a 15-year term. FHA loans, designed for borrowers with lower credit scores, have rates of 7.06% for a 30-year term and 6.00% for a 15-year term. VA loans, available to veterans and their families, have rates of 6.75% for a 30-year term and 6.17% for a 15-year term.

Mortgage refinancing involves replacing an existing home loan with a new one, a process similar to the initial mortgage application. Homeowners must meet lender criteria, including credit profile, income verification, and debt-to-income ratio. This process can result in a temporary decrease in credit score due to a hard inquiry and carries the risk of denial if the borrower does not meet the lender's requirements.

Despite hopes that mortgage interest rates would decrease following the Federal Reserve’s cuts to the federal funds rate late last year, rates have remained near the 7% mark for 30-year, fixed-rate loans nationwide. Although rates dipped slightly toward the end of February, moving closer to 6.5%, they remain significantly higher than the pandemic-era lows in the range of 2% and 3%. As of the third quarter of 2024, 82.8% of homeowners with mortgages had rates below 6%, meaning a significant portion of homeowners are locked in, unwilling or unable to move or refinance with rates as high as they are currently.

Refinancing a mortgage is not a cost-free process, and it is crucial to weigh the costs before applying. A common guideline is that refinancing makes sense if a homeowner can secure a rate that is a full percentage point lower than their current rate. For example, if a homeowner has a 7% loan, refinancing to a 6% rate could be a smart move to save on interest charges over the life of the loan. Homeowners might also consider a cash-out refinance to tap into their home equity, which typically requires at least 20% equity in the home. The cash disbursement from such a refi can be used for various purposes, including investing, covering a down payment on a vacation home or rental property, or paying off credit card debt. Refinancing can also allow homeowners to change their loan term or switch loan types, such as moving from an FHA loan to a conventional one to eliminate the FHA loan’s lifetime mortgage insurance requirement.

Refinancing involves closing costs, typically ranging from 2% to 6% of the loan amount. For a $300,000 loan, these costs could range from $6,000 to $18,000. Common 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 suited to different goals and current mortgage types. These include rate-and-term refinance, cash-out refinance, no-closing-cost refinance, and streamline refinance. Homeowners are not obligated to refinance with their original lender and should shop around to find the best interest rate and service. However, existing lenders might offer incentives, such as waiving closing costs, if homeowners stay with them. Additionally, homeowners might be eligible for programs like Refi Now and Refi Possible if their mortgage has been purchased by certain entities.