Mortgage Rates Remain Elevated Amid High Refinancing Costs and Steady Fed Policy

As of August 6, 2025, the average 30-year fixed-rate refinance mortgage stands at 6.67%, according to the latest data from Zillow, a major real estate marketplace [1]. This rate reflects a modest decline from earlier in the year when 30-year rates remained near 7%. Homeowners seeking to reduce monthly payments or tap into home equity should consider current refinancing options, as even a small reduction in interest rates can lead to meaningful savings over time.

Across different loan types and terms, the data shows varied refinance rates. For conventional mortgages, the 30-year rate is 6.67%, while the 15-year term offers a lower rate at 5.74%. The 10-year conventional mortgage remains the most competitive, with an average rate of 5.48% [1]. Jumbo mortgages, which exceed the conforming loan limit, carry higher rates, with a 30-year term averaging 7.01% and a 15-year term at 6.22% [1]. Meanwhile, FHA loans remain slightly above the conventional average, with 30-year and 15-year rates at 6.69% and 5.13%, respectively [1]. VA loans continue to offer competitive rates, with 30-year and 15-year averages at 6.36% and 5.84% [1].

The broader mortgage market remains influenced by a combination of economic conditions and the Federal Reserve’s monetary policy. Despite rate cuts from the Fed in late 2024, mortgage rates have remained stubbornly elevated. Earlier in the year, rates dipped closer to 6.5%, but they have yet to return to the historic lows seen during the pandemic when some homeowners secured mortgages with rates in the 2% to 3% range [1].

Refinancing, however, is not a free process. It typically involves closing costs that can range from 2% to 6% of the loan amount [1]. These costs include lender fees, appraisal charges, title insurance, and other administrative expenses. For a $300,000 mortgage, this could mean additional expenses between $6,000 and $18,000 [1]. As a general rule, homeowners are advised to refinance only if they can secure a rate at least 1 percentage point lower than their current mortgage [1].

There are multiple reasons to consider refinancing beyond securing a lower rate. A cash-out refinance allows homeowners to access equity in their property, provided they have at least 20% equity [1]. Refinancing can also be used to adjust loan terms—such as switching from a 15-year to a 30-year mortgage to reduce monthly payments—or changing loan types, such as from an FHA loan to a conventional loan to eliminate the need for lifetime mortgage insurance [1].

Homeowners are not limited to refinancing with their current lender. Shopping around can lead to better rates and terms, although some lenders may offer incentives to retain customers [1]. Streamline refinancing programs are also available for eligible borrowers with FHA, VA, or USDA loans, offering a streamlined application process [1]. Additionally, those with mortgages held by or may qualify for special programs such as Refi Now or Refi Possible [1].

Despite the current high rates, many homeowners remain in their existing mortgages due to the high costs and risks associated with refinancing [1]. A Redfin report found that as of the third quarter of 2024, 82.8% of mortgaged homeowners had interest rates below 6% [1]. These homeowners may choose to stay in their current loans unless market conditions shift significantly.

Source: [1] Current refi mortgage rates report for Aug. 6, 2025 (https://fortune.com/article/current-refi-mortgage-rates-08-06-2025/)