Interest rates for refinancing increase for the second consecutive day.
Refinance Rates Climb, Yet Still Lower Than April Highs
After taking a 10 basis point dive over the past two days, 30-year refinance rates have reversed course, climbing back 9 points as of Thursday and Friday. Despite this uptick, the new average of 7.15% still represents a slight improvement compared to mid-April, when a five-day surge pushed rates to a hefty 7.31% — the most expensive since July 2024.
However, with 30-year refi rates reaching as low as 6.71% in early March, the current average is relatively high. It's also significantly higher than last September's two-year low of 6.01%.
Not just the 30-year refi average, but rates for several other refi loan types also saw an increase. The 15-year average rose 5 basis points, while the 20-year average climbed 6 points, and the jumbo 30-year refinance saw a jump of 9 points.
Important:The rates we provide don't match up directly with the teaser rates you find advertised online. Teaser rates are glamorized to grab attention and may require you to pay points upfront or be based on a perfect borrower with an impressive credit score or for a smaller-than-usual loan amount. The actual rate you secure will rely on your credit score, income, and other factors that may vary from the averages shown.
Given the variation in rates among lenders, it's always wise to shop around and compare mortgage refinance options regularly, regardless of the type of home loan you're seeking.
Use our Mortgage Calculator to determine monthly payments for various loan scenarios based on your home price, down payment, loan term, property taxes, homeowners insurance, and interest rate.
What's Behind Mortgage Rate Fluctuations?
Mortgage rates are determined by a complex dance of macroeconomic and industry factors such as:
- Bond market levels and directions, particularly the 10-year Treasury yields
- The Federal Reserve's monetary policy, including bond buying and government-backed mortgage funding
- Competition among mortgage lenders and loan types
Due to the simultaneous influence of multiple factors, it's difficult to attribute any specific change to a single cause.
In 2021, the Federal Reserve kept the mortgage market relatively low by purchasing billions in bonds in response to the pandemic-induced economic pressures. This bond-buying policy played a major role in maintaining low mortgage rates.
However, starting in November 2021, the Fed began gradually reducing its bond purchases. From this point until reaching net zero in March 2022, the Fed hiked rates substantially, which has had a considerable upward impact on mortgage rates over the past two years.
Between July 2023 and September 2023, the Fed maintained the federal funds rate at its peak level. But in September, the central bank announced the first rate cut of 0.50 percentage points. The Fed then followed up with quarter-point reductions in November and December.
For their third meeting of 2025, the Fed decided to keep rates steady, and they might not make another rate cut for some time. In their March 19 forecast, the Fed projected two quarter-point rate cuts for the remainder of the year, which means there could be several rate-hold announcements in 2025.
How We Track Mortgage Rates
The national and state averages we provide assume a loan-to-value (LTV) ratio of 80% ( i.e., a down payment of at least 20%) and an applicant credit score within the 680-739 range. These rates provide a clear picture of what borrowers can expect when seeking quotes from lenders based on individual qualifications, which may differ from advertised teaser rates. © Zillow, Inc., [Year].
Enrichment Data:
Mortgage rates are shaped by the triad of economic, financial, and personal factors. Here are the key elements that influence the ups and downs in mortgage rates:
Economic Factors
- Inflation: High inflation tends to increase mortgage rates as lenders increase interest rates to preserve the buying power of the loan. On the contrary, low inflation often results in lower mortgage rates.
- Supply and Demand: High demand for mortgages thanks to limited lending capital can lead to elevated interest rates, while low demand results in lower rates to attract borrowers.
- Employment and Economic Growth: Strong employment and economic growth often boost demand for housing, resulting in higher mortgage rates. Conversely, economic downturns frequently lead to reduced rates.
Financial Factors
- Federal Reserve Policy: The Federal Reserve's decisions on interest rates, like adjusting the federal funds rate, impact mortgage rates. Lower federal funds rates tend to lead to lower mortgage rates, while higher rates increase them.
- Bond Market Activity: Mortgage rates are heavily tied to the bond market, especially the 10-year Treasury note. Generally, higher bond yields result in higher mortgage rates.
Personal Factors
- Credit Score: Borrowers with high credit scores often qualify for lower mortgage rates. Credit unions may weigh additional factors such as employment history and relationship with the credit union.
- Loan Terms: Different loan types and terms, like fixed-rate or adjustable-rate mortgages, may have varying interest rates based on the borrower's financial situation and market conditions.
- For ongoing investments in personal-finance, considering the current 7.15% average for 30-year refinance rates, investigating various mortgage refinance options from different lenders can lead to potentially lower interest rates, as rates vary among lenders.
- When planning for business or investing in real estate, it is crucial to keep an eye on the mortgage-rate fluctuations due to the influence of economic factors like inflation, employment growth, and financial factors such as the Federal Reserve's monetary policy and bond market activity. Additionally, personal factors like credit score and loan terms can significantly impact the interest rates one secures. Using tools like Zillow's Mortgage Calculator can help in determining monthly payments based on different loan scenarios.
