Current refi mortgage rates report for Dec. 4, 2025
Mortgage Refinance Rates Dip, Offering Homeowners a Potential Path to Savings
Homeowners considering a refinance may find a slightly more favorable landscape emerging, as mortgage rates have begun to ease from their recent peaks. The current average rate for a 30-year fixed-rate refinance loan sits at 6.24%, according to data from Zillow. While still elevated compared to pandemic-era lows, this represents a notable shift from the near 7% rates seen earlier in the year, potentially opening doors for millions to reduce their monthly payments or tap into home equity.
The Lock-In Effect and Recent Rate Declines
For much of 2023 and early 2024, a significant portion of homeowners were effectively “locked in” to their existing mortgages. According to Redfin, as of the third quarter of 2024, a staggering 82.8% of homeowners with mortgages had rates below 6%. This created a disincentive to sell or refinance, as moving would mean trading a historically low rate for a much higher one. However, anticipation of cuts to the federal funds rate by the Federal Reserve began to influence the market in late summer and autumn of 2025, leading to a downward trend in mortgage rates.
The Federal Reserve delivered on expectations, reducing its benchmark rate by a quarter percentage point in both September and October. These moves, while modest, signaled a potential shift in monetary policy and provided a boost to the housing market. The impact wasn’t immediate, but by October, 30-year fixed rates were averaging closer to 6% than they had been in nearly a year.
Is Refinancing Right for You? Weighing the Costs and Benefits
Refinancing isn’t a one-size-fits-all solution. It involves paying off your existing mortgage with a new loan, and comes with associated costs. A common rule of thumb is to consider refinancing if you can secure a rate at least one percentage point lower than your current rate. For example, someone with a 7% mortgage might find a refinance to 6% worthwhile. However, it’s crucial to factor in closing costs, which typically range from 2% to 6% of the loan amount. On a $300,000 loan, this translates to costs between $6,000 and $18,000.
Beyond simply lowering your interest rate, refinancing can be a strategic move for other financial goals. A cash-out refinance allows homeowners to access equity, which can be used for home improvements, debt consolidation, or other major expenses. It’s important to remember that this increases your loan balance and monthly payments. Refinancing can also be used to change the loan term – shortening it to pay off the mortgage faster, or extending it to lower monthly payments, though the latter will result in paying more interest over the life of the loan.
Navigating the Refinance Landscape: Loan Types and Lender Choices
Several types of refinance loans are available, each suited to different situations. A rate-and-term refinance is the most common, focusing on securing a better interest rate or adjusting the loan term. Streamline refinances are available for borrowers with existing FHA, VA, or USDA loans, often requiring less documentation. No-closing-cost refinances exist, but typically come with a higher interest rate, potentially negating the savings.
Homeowners aren’t obligated to refinance with their current lender. Shopping around can yield better rates and terms. However, some lenders offer incentives for customer loyalty, such as waiving closing costs. It’s wise to get quotes from multiple lenders before making a decision. Furthermore, if your mortgage is held by Fannie Mae or Freddie Mac, you may be eligible for programs like Refi Now and Refi Possible, designed to help eligible homeowners lower their rates.
Global Economic Factors and the Future of Mortgage Rates
The trajectory of mortgage rates is inextricably linked to broader economic conditions. Inflation, economic growth, and the Federal Reserve’s monetary policy all play a significant role. Globally, economic uncertainty and geopolitical events can also influence interest rates. According to the World Bank, global growth is projected to slow to 2.4% in 2024, a significant deceleration that could impact interest rate policies worldwide. This slowdown underscores the delicate balance central banks face – attempting to curb inflation without triggering a recession.
The housing market remains a critical component of the U.S. economy, and changes in mortgage rates have ripple effects throughout the financial system. While the recent decline in rates offers some relief to homeowners, the overall outlook remains uncertain. Careful consideration of individual financial circumstances and a thorough understanding of the refinance process are essential for making informed decisions.
ARTICOL ORIGINAL:
The current average refinance rate on a 30-year, fixed-rate home loan is 6.24%, according to data from the popular real estate marketplace Zillow. If you’re a homeowner hoping to refinance your mortgage for a lower rate or perhaps to tap home equity, read on to see average refi interest rates for a variety of loan types and terms. You can also see the prior day’s report here.
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Current refi rates data
Note that Fortune reviewed the most recent Zillow data available as of Dec. 3.
How mortgage refinancing works
Boiled down to the basics, mortgage refinancing involves paying off your existing loan with a new one. This process requires meeting the lender’s criteria as is the case for any loan—including your credit profile, income verification, and debt-to-income (DTI) ratio.
The application process may knock your credit score a little bit due to a hard inquiry, and there’s also the risk of denial if you don’t meet the lender’s requirements.
What’s happening with mortgage rates in the market?
Some observers had hoped that mortgage interest rates might decrease following the Federal Reserve’s cuts to the federal funds rate late last year. But mortgage rates long remained near 7% for 30-year, fixed-rate loans nationwide.
Mortgage interest rates remain significantly elevated compared to the pandemic-era lows in the range of 2% and 3%. As of the third quarter of 2024, 82.8% of homeowners with mortgages had rates below 6%, according to Redfin. This means a large number of Americans have been experiencing the lock-in effect, unable to move or refinance because they’re hanging onto a once-in-a-lifetime rate.
However, some relief came in sight toward the end of August and beginning of September 2025 and continued in October. Mortgage rates trended noticeably downward, averaging closer to 6% for 30-year, fixed-rate loans than had been seen in almost a year. This was largely connected with markets anticipating the Fed would cut the federal funds rate when it met Sept. 16-17.
The central bank delivered on this expectation, reducing its benchmark rate by a quarter percentage point in September, and followed up with another quarter percentage point cut in October.
When it might make sense to refinance your mortgage
Refinancing comes with upfront costs, so it’s important to consider when it’s beneficial. One guideline you’ll often hear is that it makes sense to refi if you can secure a rate at least a percentage point lower than your current rate. For instance, if you took out a loan at 7% and rates have since declined, refinancing at 6% would probably be a smart call in terms of long-term savings.
You might also refinance to tap into your home equity via a cash-out refinance (which typically requires that you have at least 20% equity built up).
Refinancing can also help if you want to change your loan term or switch loan types, such as moving from an FHA loan to a conventional loan to get rid of the FHA loan’s lifetime mortgage insurance (MIP) requirement, or from an adjustable-rate mortgage to a fixed-rate mortgage to avoid the potential for rate hikes.
Additionally, refinancing can be beneficial if you want to adjust your loan term. For example, switching from a 15-year to a 30-year mortgage can allow for smaller monthly payments, which might be more manageable if your financial situation has changed.
Costs to refinance your mortgage
Refinancing involves closing costs, typically ranging from 2% to 6% of the loan amount. For a $300,000 loan, costs might range from $6,000 to $18,000. Some common costs include:
- Lender origination fees.
- Appraisal fees.
- Title search and insurance fees.
- Loan application fees.
- Survey fees.
- Attorney fees (if required in your state).
- Recording fees.
- Prepayment penalties (if applicable in the terms of your current loan).
Different types of mortgage refi loans
There are many types of mortgage refinance loans available, and the right one for you will depend on what you’re trying to do and what type of mortgage you currently have. Here are some common refi types:
- Rate-and-term refinance: This is probably the most popular refi, offering the chance to secure a lower interest rate or change your loan term. Just know that if you choose to shorten your loan term, while that does typically come with a lower rate and meaningful lifetime interest savings, you’ll have to budget for higher monthly mortgage payments.
- Cash-out refinance: With a cash-out refi, you can tap your home’s equity by paying off your existing loan balance and accepting a new, larger one. You withdraw the difference in cash. That money can then be used for home improvements, consolidating high-interest debt, or virtually any other financial goal you may have.
- No-closing-cost refinance: Approach this one with a healthy level of skepticism. With this type of refi, your lender covers the closing costs in exchange for charging a higher interest rate. If you don’t have cash on hand for closing costs and could otherwise benefit from a refinance, this option may be worth a look.
- Streamline refinance: Available to existing FHA, VA and USDA loan borrowers, a streamline refi will typically involve less documentation and offer a more straightforward application and approval process.
Refinancing with your existing lender vs. a new one
You’re not required to refinance with your original lender. Shopping around might potentially help you find better rates and service.
That said, some lenders offer incentives, such as waiving closing costs, for staying with them. So you should at least do the due diligence of checking with your existing lender before making a decision.
Also, know that if your mortgage has been purchased by Fannie Mae or Freddie Mac, you might be eligible for programs like Refi Now and Refi Possible.