Mortgage Rates Remain High at 6.90% Despite Federal Cuts

On July 18, 2025, the average refinance rate for a 30-year, fixed-rate home loan stood at 6.90%. 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 6.90% for 30-year terms, 6.86% for 20-year terms, 5.95% for 15-year terms, and 6.03% for 10-year terms. Jumbo mortgages, which cater to larger loan amounts, have rates of 7.57% for 30-year terms and 7.24% for 15-year terms. FHA loans, designed for borrowers with lower credit scores or smaller down payments, come with rates of 7.63% for 30-year terms and 5.63% for 15-year terms. VA loans, available to eligible military personnel and veterans, offer rates of 6.52% for 30-year terms and 5.78% for 15-year terms.

Mortgage refinancing involves replacing an existing home loan with a new one, a process that requires meeting lender criteria similar to those for an initial mortgage application. This includes credit profile, proof of income, and debt-to-income ratio. The process typically results in a temporary decrease in credit score due to a hard inquiry and carries the risk of denial if the borrower does not meet the lender's requirements.

Market watchers had anticipated that mortgage interest rates would decline following several cuts to the federal funds rate late last year. However, this did not materialize, and rates remained near the 7% mark for 30-year, fixed-rate loans. While rates did drop slightly toward the end of February, they have remained well above the pandemic-era lows, when some homeowners secured rates in the 2% or 3% range. A report indicated that as of the third quarter of 2024, 82.8% of homeowners with a mortgage had a rate below 6%, making many reluctant or unable to refinance in the current environment.

Refinancing a mortgage is not a cost-free endeavor. It involves closing costs that can range from 2% to 6% of the loan amount. For a $300,000 loan, this could translate to between $6,000 and $18,000 in refi closing costs. These costs may include lender origination fees, appraisal fees, title search and insurance fees, loan application fees, survey fees, attorney fees, recording fees, and prepayment penalties. Despite these costs, refinancing can be strategic in certain situations. For example, if a homeowner can secure a new rate that is a full percentage point lower than their current rate, it is generally worth considering. Additionally, refinancing can be beneficial for tapping home equity through a cash-out refi, changing loan terms, or switching loan types.

There are several types of mortgage refinance loans available, each serving different purposes. A rate-and-term refinance allows homeowners to lower their interest rate and/or change their loan term. A cash-out refinance enables homeowners to tap into their home's equity by replacing their existing loan balance with a larger one and taking the difference in cash. A no-closing-cost refinance involves the lender covering closing costs in exchange for a higher interest rate. Streamline refinance options are available to existing FHA, VA, and USDA loan borrowers and typically involve less documentation and a more straightforward application process.

Homeowners are not obligated to refinance with their existing lender and may benefit from shopping around for the best rates and services. Some lenders offer incentives for staying with them, such as waiving a portion of the closing costs. These incentives can make refinancing more feasible and are worth discussing with the lender. Additionally, homeowners whose mortgages were purchased by certain entities may be eligible for programs like Refi Now and Refi Possible.