Zillow Reports 6.76% Average 30-Year Refinance Rate in U.S. as Homeowners Weigh Savings and Costs

On August 4, 2025, Zillow reported that the average refinance rate for a 30-year fixed-rate mortgage in the United States stands at 6.76%. This rate represents a modest decline from recent months, offering potential savings for homeowners considering refinancing. The data also highlights varying rates across different loan types and terms, with conventional 15-year loans at 5.82%, jumbo 30-year loans at 8.35%, and VA 30-year loans at 6.39% [1].

Mortgage refinancing remains a strategic tool for homeowners seeking lower interest rates, improved loan terms, or access to home equity. The process involves replacing an existing mortgage with a new loan, requiring lenders to evaluate creditworthiness, income, and debt-to-income ratios. However, refinancing comes with upfront costs, typically ranging between 2% and 6% of the loan amount, including fees for appraisals, title searches, and legal services [1]. These costs must be weighed against potential long-term savings when determining whether refinancing is beneficial.

The recent refinancing landscape has been shaped by broader trends in mortgage rates. Despite expectations that the Federal Reserve’s rate cuts late in 2024 would lead to lower mortgage rates, they have remained near the 7% level for much of the year. A slight dip occurred toward the end of February 2025, bringing 30-year rates closer to 6.5%, but they remain significantly above the historic lows seen during the pandemic, when rates hovered near 2–3%. As of the third quarter of 2024, 82.8% of homeowners had mortgages with rates below 6%, according to Redfin [1]. This suggests many homeowners are hesitant to move or refinance due to uncertainty and the costs associated with new loans.

Refinancing can make sense in several scenarios. A common rule of thumb is that refinancing is worth considering if the new rate is at least 1% lower than the existing rate. For example, a homeowner with a 7% mortgage might benefit from refinancing if rates drop to 6%. Additionally, refinancing can be a way to extract equity from a home through a cash-out refi, provided the homeowner has at least 20% equity in the property. Refinancing also allows homeowners to adjust loan terms, such as switching from a 15-year to a 30-year mortgage to reduce monthly payments, or from an adjustable-rate to a fixed-rate mortgage to avoid future rate increases [1].

Homeowners should also consider the type of refinancing loan that best suits their needs. A rate-and-term refinance is the most common option, allowing for a lower interest rate or a shorter loan term, while a cash-out refinance provides access to home equity. For those unable to pay closing costs upfront, a no-closing-cost refinance may be an option, though it typically involves a higher interest rate. Streamline refinancing options are available for existing FHA, VA, and USDA loan holders, offering a simplified process with fewer requirements [1].

When choosing a lender, homeowners are not restricted to their original mortgage provider. Shopping around for the best rates and terms is recommended. Some lenders may offer incentives, such as reduced closing costs, to retain existing customers. Additionally, homeowners with mortgages held by government-backed entities may qualify for special programs like Refi Now or Refi Possible [1].

The current refinance rate environment reflects ongoing uncertainty in the housing market. While rates have dipped slightly from earlier in the year, they remain above pre-pandemic levels, deterring many homeowners from moving or refinancing. The decision to refinance must be carefully evaluated based on individual financial goals, loan terms, and the cost-benefit analysis of potential savings versus upfront expenses.

Source:

[1] Current refi mortgage rates report for Aug. 4, 2025

https://fortune.com/article/current-refi-mortgage-rates-08-04-2025/