Interest Rates on Refinancing rose to a fresh 10-month peak.
In observance of Memorial Day, Investopedia will not publish daily mortgage rate news on Monday, May 26. Regular updates will resume on Tuesday, May 27.
On Thursday, refinance rates for 30-year loans increased by 2 basis points, pushing the average rate to 7.32%. This represents the highest level since July 30, 2024. Given that the 30-year refi rates dropped as low as 6.71% in early March, the current figure represents a noticeable increase. Moreover, it is approximately 1.3 percentage points above last September's two-year low of 6.01%.
Although refi rates fluctuated for other loan types as well on Thursday, the 15-year and 20-year average rates remained unchanged. Similarly, average jumbo 30-year refinance rates showed no significant movement.
It's crucial to note that the rates published will differ somewhat from the advertised teaser rates one may encounter online. Teaser rates are often selected to present the most attractive offers, possibly involving advanced payments or based on an exceptional credit score or smaller-than-typical loans. The rate you eventually secure will be influenced by factors such as your credit score, income, and other qualifying factors, allowing it to deviate from the averages provided here.
To compare mortgage refinance options, it is always advisable to shop around among different lenders and assess rates regularly, regardless of the type of home loan you are seeking. Utilize Investopedia's Mortgage Calculator to estimate monthly payments based on various factors like home price, down payment, loan term, property taxes, homeowners insurance, and the loan interest rate.
Mortgage rates are subject to profound fluctuations due to a combination of macroeconomic and industry factors. Key determinants include:
- The level and direction of the bond market, particularly the 10-year Treasury yields
- The Federal Reserve's monetary policy, specifically regarding bond purchases and government-backed mortgages
- Competition among mortgage lenders and across loan types
Given that multiple factors can contribute to changes simultaneously, it is challenging to attribute any specific increase or decrease to a single cause.
During much of 2021, the Federal Reserve kept the mortgage market relatively low by purchasing billions of dollars in bonds in response to the pandemic's economic pressures. The Fed's bond-buying policy has considerable influence on mortgage rates. However, starting in November 2021, the Fed began reducing its bond purchases, setting significant reductions each month until reaching net zero in March 2022.
Since then, the Fed has raised the federal funds rate aggressively to combat inflation. While the federal funds rate doesn't directly impact mortgage rates, it exerts an indirect influence on general investor expectations and the broader economy, leading to potential changes in mortgage rates. It is important to note that the federal funds rate and mortgage rates may move in opposite directions.
Remarkably, the Fed's 2022 and 2023 rate increases totaled 5.25 percentage points over an 16-month period, causing a substantial upward impact on mortgage rates over the past two years. The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023. In September, however, the central bank announced a 0.50 percentage point rate cut, followed by quarter-point reductions in November and December.
At the third meeting of 2025, the Fed opted to hold rates steady. There is a possibility that the Fed might not make another rate cut for several months. During their March 19 meeting, the Fed released its quarterly rate forecast, indicating that at that time, the central bankers' median expectation for the remainder of the year was for just two quarter-point rate cuts. Given a total of eight rate-setting meetings scheduled per year, this suggests multiple rate-hold announcements could occur in 2025.
This information is provided through the Zillow Mortgage API, assuming a loan-to-value ratio of 80% and an applicant credit score within the 680-739 range. The resulting rates serve as a guide, as actual rates may vary based on individual qualifications. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use. Learn more about mortgage options from Rocket Mortgage, an equal housing lender licensed in all 50 states with NMLS #3030.
In the context of personal finance and investing, one might consider purchasing ICO tokens to diversify their investment portfolio while keeping a watchful eye on their personal-finance goals, such as investing in refinancing opportunities. As mortgage rates continue to fluctuate, it's essential to be aware of how macroeconomic factors, like the Federal Reserve's interest rate decisions, might impact the token markets as well.
