Mortgage Rates Today: 30-Year Fixed Refinance Rate Goes Down by 9 Basis Points

If you're looking to refinance your home, there's some potentially good news! As of today, August 29, 2025, the national average for a 30-year fixed refinance rate has decreased to 6.79%, a drop of 9 basis points from the previous week. While these fluctuations may seem small, they can make a difference in your monthly payments and overall interest paid over the life of the loan. Let's dive into what this means for you and what factors are influencing these rates.

Mortgage Rates Today: 30-Year Fixed Refinance Rate Drops by 9 Basis Points

Here's a quick snapshot of the refinance rate changes:

• 30-Year Fixed: Down 9 basis points to 6.79%
• 15-Year Fixed: Up 16 basis points to 5.72%
• 5-Year ARM: Down 4 basis points to 7.21%

These numbers, released by Zillow, tell a story of a fluctuating market. The 30-year fixed rate is the most popular option, and the recent dip is a welcome sign for homeowners considering a refinance today.

Is Now a Good Time to Refinance?

That's the million-dollar question, isn't it? I've been tracking mortgage rates for years and my usual guidance is that the answer depends on a number of factors, including your current mortgage rate, how long you plan to stay in your home, and your financial goals.

Here's a quick rundown:

• What to consider:
  • Your current rate: You generally want to refinance if you can get a rate that's at least 0.5% to 1% lower than your current rate.
  • How long you plan to stay: If you're planning to move in a year or two, the closing costs of refinancing might not be worth it.
  • Your financial goals: Are you looking to lower your monthly payments, shorten your loan term, or tap into your home equity?
• My advice: A drop of nine basis points, like we've seen with the 30 year fixed refinance rate, might not seem like much, but over the life of a 30-year mortgage, it can save you a significant amount of money. Use a mortgage calculator to see how it affects your payments.

The Federal Reserve's Role: Why You Should Pay Attention

Mortgage rates don't just magically appear. They're heavily influenced by the Federal Reserve's monetary policy. The Fed, as it's commonly referred to, has a massive impact on the economy, and its decisions ripple through the housing market.

Let's take a look back the last few years and what we can expect of the Fed moving forward:

• Pandemic Era (2021-2023): The Fed kept rates low to encourage spending, which caused historic lows for mortgages.
• The Rate Hike Frenzy (2022-2023): Then, to combat inflation, the Fed aggressively raised rates, leading to some of the highest mortgage rates we've seen in two decades. This was a really challenging time for both buyers and those looking to refinance. The Federal Reserve increased the federal funds rate by 5.25 percentage points during this time.
• The Pause (Early 2025): The Fed held steady for 14 months, providing a period of stability.
• Anticipated Cuts (Late 2024 and Beyond): The Fed cut rates three times to boost the economy.

What's in Store for the Rest of 2025?

This is where it gets interesting and where a degree of experience in interpreting these details becomes very important.

• The September Meeting: The market is very strongly anticipating a rate cut at the September 16-17 meeting. Tools like the CME FedWatch Tool currently show an 85-95% chance of a cut! If it really happens, its anticipated to lower borrowing across the economy. This expectation is built on the cooling inflation rate of 2.7%, a weakening labor market, and forecasted slowdowns.
• Jackson Hole Symposium: Before that, all eyes will be on Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium on August 22. Even though he always mentions that monetary decisions involve data and that this is an evolving situation, people will still scrutinize his tone for validation of what is to be expected.
• Future Cuts: The Fed's own projections suggest two cuts in 2025. A September cut could potentially pull mortgage rates towards 6% by year-end.

A Word of Caution

Even with these clear market interpretations, you need to tread these situations very carefully. While the market is strongly anticipating a rate cut, it's not guaranteed. Unexpectedly persistent inflation or surprisingly strong economic data could throw a wrench in the works. Don't make any rash decisions based on speculation.

What This Means for You

• If you're a current buyer: Hang in there! Relief may be on the horizon with a rate cut later in the year.
• If you're thinking about refinancing: If your rate is above 7%, keep a very close eye on the September meeting by the Fed.
• If you're an investor: The bond markets are currently very volatile in the face of these predictions.

In Conclusion

The decrease in the 30-year fixed refinance rate is just one piece of the puzzle of this complex housing market. Keep an eye on the Fed, assess your own financial situation, and don't be afraid to consult with a financial expert to make the best decision for your unique needs.