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

On July 3, 2025, the average refinance rate for a 30-year, fixed-rate home loan stood at 6.76%. This rate is indicative of the current market conditions for homeowners looking to refinance their mortgages. For those considering a refinance, the rates for various loan types and terms are as follows: 20-year conventional mortgages are at 6.41%, 15-year conventional mortgages at 5.79%, and 10-year conventional mortgages at 5.62%. Jumbo mortgages, which are larger than conventional loans, have a 30-year rate of 7.32% and a 15-year rate of 8.02%. FHA loans, which are backed by the Federal Housing Administration, have a 30-year rate of 6.94% and a 15-year rate of 5.60%. VA loans, designed for veterans and their families, offer a 30-year rate of 6.28% and a 15-year rate of 5.72%.

Mortgage refinancing involves replacing an existing loan with a new one, a process that requires meeting the lender’s criteria, including credit profile, income verification, and debt-to-income ratio. The application process may temporarily lower your credit score due to a hard inquiry, and there is a risk of denial if you do not meet the lender’s requirements. Despite hopes that mortgage interest rates might decrease following the Federal Reserve’s cuts to the federal funds rate late last year, rates have remained near 7% for 30-year, fixed-rate loans nationwide. There was a slight dip toward the end of February where the average rate fell closer to 6.5%, but rates remain significantly elevated compared to 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 large number of Americans are experiencing the lock-in effect, unable to move or refinance because they’re hanging onto a once-in-a-lifetime rate.

Refinancing comes with upfront costs, so it’s important to consider when it’s beneficial. One guideline is that it makes sense to refinance if you can secure a rate at least a percentage point lower than your current rate. For instance, if you took out a loan at 7% and rates have since declined, refinancing at 6% would probably be a smart call in terms of long-term savings. You might also refinance to tap into your home equity via a cash-out refinance, which typically requires that you have at least 20% equity built up. Refinancing can also help if you want to change your loan term or switch loan types, such as moving from an FHA loan to a conventional loan to get rid of the FHA loan’s lifetime mortgage insurance requirement, or from an adjustable-rate mortgage to a fixed-rate mortgage to avoid the potential for rate hikes. Additionally, refinancing can be beneficial if you want to adjust your loan term. For example, switching from a 15-year to a 30-year mortgage can allow for smaller monthly payments, which might be more manageable if your financial situation has changed.

Refinancing involves closing costs, typically ranging from 2% to 6% of the loan amount. For a $300,000 loan, costs might range from $6,000 to $18,000. Some 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 many types of mortgage refinance loans available, and the right one for you will depend on what you’re trying to do and what type of mortgage you currently have. Common refi types include rate-and-term refinance, cash-out refinance, no-closing-cost refinance, and streamline refinance. You’re not required to refinance with your original lender. Shopping around might potentially help you find better rates and service. That said, some lenders offer incentives, such as waiving closing costs, for staying with them. So you should at least do the due diligence of checking with your existing lender before making a decision.