Mortgage Rates Today: 30-Year Fixed Refinance Rate Rises by 43 Basis Points

If you're thinking about refinancing your mortgage, you'll want to pay close attention. Today, September 19, 2025, the national average for a 30-year fixed refinance rate is now at 7.08%, climbing a significant 43 basis points from last week. This is according to the latest data from Zillow.

Now, let's dive into what's driving these changes and what they mean for you when trying to get a better mortgage rate.

Mortgage Rates Today: 30-Year Fixed Refinance Rate Rises by 43 Basis Points

Understanding the Refinance Rate Hike

It's never fun to see rates go up, especially if you're hoping to save money by refinancing. Aside from the 30-year refinance rates, here's a quick snapshot of how other refinance rates are looking:

• 15-Year Fixed Refinance Rate: Increased by 11 basis points, now averaging at 5.77%.
• 5-Year ARM Refinance Rate: Increased by 5 basis points, currently at 7.39%.

So, why the sudden jump? While I can't say for sure without seeing the bigger picture, here's what I believe could be happening:

• Market Correction: Mortgage rates fluctuate daily based on investor sentiment and economic data. Sometimes, a rapid increase can be a correction after a period of lower rates.
• Inflation Concerns: If the market anticipates rising inflation, rates tend to climb as investors demand higher returns to compensate for the decreasing value of their money.
• Economic Uncertainty: Any major economic announcement or event that creates uncertainty can lead to volatility in the mortgage market.

The Federal Reserve's Recent Interest Rate Cut

Now, let's throw another important piece of news into the mix: the Federal Reserve just made its first interest rate cut of 2025 on September 17th. They lowered the benchmark interest rate by a quarter percentage point, setting the target range between 4.0% and 4.25%.

You might be thinking, “Wait a minute, the Fed cut rates, so why are mortgage rates going up?” It's a valid question, and here's the explanation:

The Fed doesn't directly set mortgage rates. Instead, their actions influence the 10-year U.S. Treasury yield, which acts as a benchmark for 30-year fixed mortgages. Mortgage rates are usually already “priced in” by the market based on future expectations, so the effect is less direct. When the Fed cuts rates, it signals a belief that the economy needs a boost, often leading to lower Treasury yields. Lower yields can indeed translate into lower mortgage rates.

Why the Rate Cut?

• Slowing Job Market: Acknowledging the slowed growth in job creation.
• Risk Management: Aiming to prop up the economy amidst persistent (but not alarmingly high) inflation.

So, Why Are Mortgage Rates Rising Despite the Cut?

This is where it gets tricky. Several factors can explain why mortgage rates might increase even after a Fed rate cut:

1. Market Expectations: If the market anticipated a more aggressive rate cut by the Fed, the actual cut might be seen as underwhelming, thus pushing rates slightly upward.
2. Inflation Worries: If investors are still concerned about inflation, they might demand higher yields for mortgage-backed securities, driving up mortgage rates.
3. Strong Economic Data: Paradoxically, strong economic data (like unexpectedly high consumer spending) can sometimes push rates up because it reduces the urgency for further rate cuts by the Fed.
4. Inventory Levels: If there is a low supply of houses, the price of houses will go up and mortgage rate tends to follow.

Is Refinancing Still Worth It? A Look at 7.08%

This is the million-dollar question! With the 30-year fixed refinance rate at 7.08%, is it still a good time to refinance? The answer is, as always, it depends on your individual situation.

Here's what to consider:

• Current Interest Rate: What rate are you paying on your existing mortgage? If it's significantly higher than 7.08%, refinancing could still save you money.
• Loan Term: How long do you have left on your current mortgage? Refinancing to a new 30-year loan will lower your payments but it will extend your overall repayment period, potentially costing you more in interest over the long run.
• Closing Costs: Refinancing involves closing costs, which can include appraisal fees, origination fees, and title insurance. Calculate whether the savings from a lower interest rate will outweigh these costs.
• Long-Term Financial Goals: Do you plan to stay in your home for the long term? Or might you move in the next few years? If you plan to move soon, the benefits of refinancing might not be worth the upfront costs.

Here's a simple chart to help you decide:

Factor	Consider Refinancing	Hold Off on Refinancing
Current Rate	Significantly higher than 7.08%	Only slightly higher or lower than 7.08%
Loan Term	Want to lower monthly payments, even if it extends the loan term	Focused on paying off the mortgage quickly, even if it means higher monthly payments
Closing Costs	Savings from lower rate outweigh closing costs within a reasonable timeframe (2-3 yrs)	Closing costs exceed potential savings
Financial Goals	Plan to stay in the home for the long term	May move in the next few years

The Outlook for the Housing Market

We have been seeing positive developments, with the hope for lower mortgage rates enhancing affordability and purchasing power for buyers. It motivates owners to start selling too as they are relieved from the burdens of “rate-locked” loans.

What's Next? The future is uncertain and we must look at the following reports in upcoming months:

• Inflation Reports: Any increase in price could pause the cutting of rates.
• Labour Market Data: More weakening could lead to more aggresive action, but stabilization would lead to pause.

My advice? Shop around! Don't settle for the first rate you see. Check with multiple lenders and compare offers. A little research can save you a lot of money.