Homeowners Stuck as Refi Rates Stay Stubbornly High

As of Sept. 10, 2025, the average refinance rate for a 30-year, fixed-rate home loan in the U.S. stands at 6.36%, according to data from Zillow, a major real estate marketplace. This figure reflects the latest in a market that has seen elevated mortgage rates for much of the year, with refinancing options across multiple loan types and terms. The rates for shorter-term conventional mortgages also remain relatively high, with 20-year loans averaging 6.09%, 15-year loans at 5.42%, and 10-year loans at 5.79%. Jumbo mortgages show even higher rates, with the 30-year loan averaging 6.90% and the 15-year loan at 6.29%. For government-backed loans, the 30-year FHA loan stands at 6.06% and the 15-year at 5.35%, while VA loans offer slightly lower rates at 5.92% for the 30-year and 5.62% for the 15-year.

The broader mortgage refinancing landscape remains challenging for homeowners, as interest rates have not followed the downward trend seen in the Federal Reserve’s federal funds rate. Despite some downward movement in early 2025, the 30-year, fixed-rate mortgage average remains well above historical lows, which saw rates as low as 2–3% during the pandemic. A report from Redfin revealed that as of the third quarter of 2024, 82.8% of homeowners with mortgages still had rates under 6%. Many of these homeowners are either unwilling or unable to refinance in the current environment due to rising rates and the costs associated with the process.

Mortgage refinancing involves replacing an existing loan with a new one, and like an initial mortgage application, it requires meeting lender criteria such as credit score, income verification, and a favorable debt-to-income (DTI) ratio. However, the process is not without risk; hard inquiries can temporarily lower credit scores, and applicants who fail to meet lender requirements may face denial. Additionally, closing costs typically range from 2% to 6% of the loan amount, with potential fees for appraisals, title searches, attorney services, and loan applications, among others.

Homeowners considering refinancing must also evaluate the cost-benefit tradeoff. A common rule of thumb is that refinancing becomes worthwhile if a lower interest rate can be secured by at least 1 percentage point. Beyond lowering rates, refinancing can also be used to tap into home equity through cash-out refinances or to switch loan types—such as moving from an FHA to a conventional loan to eliminate mandatory mortgage insurance. It can also help borrowers adjust their loan terms, such as switching from a 15-year to a 30-year mortgage to reduce monthly payments.

Several refinancing options exist to suit different financial needs, including rate-and-term refinancing, cash-out refinancing, no-closing-cost refinancing, and streamline refinancing for government-backed loans. Borrowers are also not restricted to their original lender; shopping around can lead to better rates and terms, though existing lenders may offer incentives such as waived closing costs to retain customers.