30-Year Fixed-Rate Mortgage Stands at 6.75% Despite Fed Cuts

On July 1, 2025, the average refinance rate for a 30-year, fixed-rate home loan stood at 6.75%. 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, offer rates of 6.05% for a 20-year term, 5.74% for a 15-year term, and 5.62% for a 10-year term. Jumbo mortgages, which are larger than conventional loans, have rates of 7.67% for a 30-year term and 7.50% for a 15-year term. FHA loans, designed for borrowers with lower credit scores, come with rates of 7.42% for a 30-year term and 5.67% for a 15-year term. VA loans, available to eligible military personnel and veterans, offer rates of 6.50% for a 30-year term and 5.72% 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 temporarily lower the credit score due to a hard inquiry and may result in 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%, indicating that a significant number 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 suggests 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, or from an adjustable-rate mortgage to a fixed-rate mortgage.

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 needs and goals. Rate-and-term refinance is the most popular type, allowing homeowners to lower their interest rate and/or change their loan term. Cash-out refinance taps into home equity by replacing the existing loan balance with a new, larger one and withdrawing the difference in cash. No-closing-cost refinance covers closing costs in exchange for a higher interest rate, while streamline refinance is designed for existing FHA, VA, and USDA loan borrowers, offering a more straightforward application and approval process.

Homeowners are not obligated to refinance with their original lender and shopping around can help find the lowest interest rate and best service. However, existing lenders might offer incentives, such as waiving closing costs, if homeowners stay with them. It is also important to note that if a mortgage has been purchased by certain entities, homeowners might be eligible for programs like Refi Now and Refi Possible.