Mortgage Rates Plunge to 5-Month Low—Is 2025 the Perfect Time to Refinance?

Homebuyers hoping for relief at the closing table woke up today to a mixed picture on mortgage rates. According to Bankrate’s nationwide lender survey, the average 30-year fixed mortgage rate is 6.34 percent, with an accompanying APR of 6.40 percent, virtually flat compared with last week but still well below the 7 percent territory touched earlier this year. Refinance shoppers will pay more: the typical 30-year refi now carries a 6.74 percent rate and a 6.80 percent APR, a reminder that lenders continue to price extra risk into cash-out and rate-term transactions. Meanwhile, Freddie Mac’s most recent Primary Mortgage Market Survey, released November 20, logged the 30-year fixed at 6.26 percent, its narrowest range in more than a month as volatility subsides. Why mortgage rates are stuck in the mid-6s 1. Treasury yields: The 10-year note—often a bellwether for mortgage pricing—has hovered between 4.0 percent and 4.2 percent, keeping lenders from making big moves in either direction. 2. Federal Reserve signals: Minutes from the Fed’s latest meeting show officials leaning toward holding policy steady through year-end, yet refusing to rule out more hikes if inflation flares again. That uncertainty limits how far mortgage rates can fall. 3. Seasonal slowdown: With existing-home sales running at a 4.1 million annual pace, lenders have less volume to spread overhead costs, which also props up rates. What today’s mortgage rates mean for buyers • A $350,000 loan at 6.34 percent translates to a monthly principal-and-interest payment of roughly $2,170, about $140 less than the same loan would have cost at October’s 7.00 percent peak. • Borrowers with strong credit (740+) and at least 20 percent down can still find quotes a quarter-point below headline averages by shopping multiple lenders and considering lender-paid points. • Adjustable-rate mortgages (ARMs) remain only modestly cheaper; most 5/1 ARMs are priced in the high-5s, limiting their appeal unless the borrower plans to sell within five years. Should you lock a rate now? Economists widely expect the 30-year fixed to edge toward the high-5s by mid-2026 as inflation cools and the Fed begins cutting short-term rates. But the path lower is unlikely to be smooth. If you have a signed purchase contract or a refi that breaks even in three years or less, locking now protects you from sudden Treasury spikes. If you’re still home-shopping, ask about a “float-down” option that lets you capture any drop before closing. Tips to land the best mortgage rate today • Boost your FICO score above 760 by paying down revolving balances and disputing errors. • Keep your debt-to-income ratio below 36 percent; pay off small auto or personal loans if possible. • Compare at least three quotes on the same day; even an eighth-of-a-point difference trims roughly $30 per month on a $400,000 mortgage. • Consider buying discount points only if you expect to keep the loan at least five years. Bottom line Today’s mortgage rates remain challenging but no longer feel like a moving target. With incremental declines likely rather than dramatic drops, proactive borrowers—especially first-time buyers—can still unlock savings by improving credit, increasing down payments and shopping aggressively. Keep an eye on upcoming inflation data and the next Fed meeting; both could nudge the 30-year fixed into new territory before the spring buying season kicks off.