Discover January 2025 Mortgage Refinance Rates in Your State!
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Are you ready to take control of your finances? The best 30-year mortgage refinance rates are currently found in some of the most vibrant states across the nation. New York, California, Florida, Colorado, Virginia, Washington, and Minnesota are leading the pack with averages ranging from 6.82% to 7.03%. If you’re looking to refinance, these states are your golden ticket!
On the flip side, keep an eye on Hawaii, Kentucky, Indiana, Nevada, Illinois, Georgia, and Alaska. With 30-year refinance averages sitting between 7.14% and 7.19%, the costs could add up quickly. It’s crucial to stay informed and know your options!
Mortgage refinance rates aren’t one-size-fits-all. They fluctuate based on the region, influenced by local lenders, varying credit scores, average loan sizes, and state regulations. Each lender has a unique risk management strategy that impacts the rates they offer, so it’s essential to shop around!
Consider this: rates can vary significantly from lender to lender. Always do your homework before committing to a mortgage. It’s a smart move to consistently compare rates and find the best mortgage option available for your situation, regardless of the type of home loan you’re pursuing.
Important
Be aware that the rates we present differ from the eye-catching teaser rates you might find online. These promotional rates are often selectively advertised and may only apply to borrowers with outstanding credit or smaller loans. The rate you secure will ultimately depend on your credit score, income, and various other factors, meaning your experience could vary from the averages reflected here.
National Mortgage Refinance Rate Averages
The national average for 30-year refinance mortgages dipped slightly on Thursday, landing at 7.09%. This figure has climbed over a percentage point from mid-September when it hit a low of 6.01%, marking a two-year low.
| National Averages of Lenders’ Best Mortgage Rates | |
|---|---|
| Loan Type | Refinance Rate Average |
| 30-Year Fixed | 7.09% |
| FHA 30-Year Fixed | 6.29% |
| 15-Year Fixed | 6.02% |
| Jumbo 30-Year Fixed | 6.88% |
| 5/6 ARM | 6.91% |
| Provided via the Zillow Mortgage API | |
Calculate your monthly payments under different loan scenarios using our Mortgage Calculator.
What Causes Mortgage Rates to Rise or Fall?
Mortgage rates are shaped by a range of complex economic factors, including:
- The trends in the bond market, particularly 10-year Treasury yields
- The current monetary policy of the Federal Reserve, especially its bond purchasing strategies
- Competition among mortgage lenders and across different loan types
These factors can fluctuate simultaneously, making it challenging to pinpoint the exact cause of any rate change.
For much of 2021, macroeconomic factors kept mortgage rates relatively low. The Federal Reserve’s aggressive bond-buying in response to pandemic pressures played a significant role in this scenario. This bond-buying strategy has historically influenced mortgage rates.
However, as of November 2021, the Fed began to taper its bond purchases, ultimately ceasing them by March 2022.
From that point until July 2023, the Fed aggressively increased the federal funds rate to combat soaring inflation. Although the federal funds rate affects mortgage rates, they don’t always move in tandem — they can even diverge.
The rapid pace of rate hikes — a total increase of 5.25 percentage points over just 16 months — has significantly impacted mortgage rates, leading to a dramatic rise over the past two years.
The Fed kept the federal funds rate at its peak for nearly 14 months starting July 2023, but on September 18, the central bank finally announced a rate cut of 0.50 percentage points, with more reductions following on November 7 and December 18.
Despite these adjustments, the Fed’s policy committee indicated during its December meeting that further rate cuts may not happen as frequently as previously anticipated — with only two rate cuts projected for 2025 instead of four. This tempered outlook has put upward pressure on 10-year Treasury yields and, consequently, mortgage rates.
How We Track Mortgage Rates
The national and state averages provided here are derived from the Zillow Mortgage API, based on a loan-to-value (LTV) ratio of 80% (meaning a down payment of at least 20%) and a credit score range of 680–739. This gives borrowers a realistic expectation of what they might see when shopping for loans, which may differ from those enticing teaser rates advertised elsewhere. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.
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