U.S. 30-Year Mortgage Rates Hold Near 7% as Refinancing Remains Costly

As of July 31, 2025, the average refinance rate for a 30-year, fixed-rate mortgage in the U.S. is 6.84%, according to Zillow [1]. Homeowners looking to reduce their mortgage payments or access equity are finding the market at relatively high interest levels, with the rate remaining near 7% for much of the year. Rates for shorter-term fixed-rate loans are somewhat lower, with 15-year fixed-rate loans averaging 5.90% and 10-year loans at 5.94%. Jumbo mortgages, which typically require larger down payments and are used for high-value properties, show significantly higher rates, with 30-year loans at 8.06% and 15-year loans at 8.41% [1]. FHA and VA loans, which are government-backed and may offer more flexible terms, also remain elevated, with 30-year FHA loans at 6.41% and 30-year VA loans at 5.97% [1].

Mortgage refinancing remains a complex decision, involving upfront costs such as lender fees, appraisal charges, and title insurance. These costs can range between 2% and 6% of the loan amount, which for a $300,000 loan could mean $6,000 to $18,000 in expenses [1]. Refinancing is often considered beneficial when borrowers can secure a rate at least 1% lower than their current rate, as this can lead to long-term savings. Additionally, homeowners with at least 20% equity may choose to pursue a cash-out refinance to access funds for home improvements or debt consolidation [1].

The broader market context shows that despite the Federal Reserve's rate cuts in late 2024, mortgage rates have remained elevated. While there was a brief dip near 6.5% at the end of February 2025, rates have not returned to the sub-4% levels seen during the pandemic. According to Redfin, 82.8% of homeowners with mortgages in the third quarter of 2024 had rates below 6%, meaning many are currently locked into favorable terms and less inclined to refinance [1]. This lock-in effect is shaping current refinancing trends, with a significant portion of homeowners avoiding the market due to uncertainty and the risk of higher interest costs.

Refinancing options include rate-and-term loans, which allow homeowners to adjust their interest rates or loan terms, and cash-out refinance options, which provide access to equity. Streamline refinancing is available to those with existing government-backed loans and typically requires less documentation. No-closing-cost refinancing options exist, though these often come with trade-offs such as higher interest rates [1]. Borrowers are also advised to compare offers from multiple lenders, as switching institutions can potentially offer better terms, although existing lenders may offer incentives such as closing cost waivers.

Homeowners considering refinancing should evaluate their financial goals, including whether they want to reduce monthly payments, shorten their loan term, or access equity. The decision to refinance is ultimately a balance between the immediate costs and the long-term benefits, and careful planning is essential to determine if the move is financially advantageous [1].

Source: [1] Current refi mortgage rates report for July 31, 2025 (https://fortune.com/article/current-refi-mortgage-rates-07-31-2025/)