Mortgage Rates Today: 30-Year FRM Drops to 6.73%, 15-Year FRM Dips to 5.71%

If you're looking for the mortgage rates today, July 1, 2025, the news is cautiously optimistic. While national average rates show a slight downward trend, it's important to understand what's driving these changes and what the experts predict for the near future. According to Zillow, the national average for a 30-year fixed mortgage is around 6.74%. Let's dive into the details and see what's happening.

Mortgage Rates Today: 30-Year FRM Drops to 6.73%, 15-Year FRM Dips to 5.71%

Key Takeaways:

• 30-Year Fixed Mortgage Rates: Averaging around 6.74%, a slight decrease from the prior week. This is the most common type of mortgage, so its movement is particularly significant.
• Refinance Rates: Also seeing a minor dip, offering potential opportunities for homeowners. If you've been waiting for a chance to lower your monthly payments, now might be the time to investigate.
• Expert Predictions: Most experts are forecasting relatively stable rates in the mid-6% range for the coming months. While there's no guarantee, this suggests a period of relative predictability.
• Federal Reserve (The Fed): Their actions on July 30th could influence rates, but significant cuts are unlikely due to inflation. All eyes are on this upcoming meeting.
• Inflation: Rising inflation is a wild card that could prevent large rate cuts by the Federal Reserve. Keeping an eye on inflation data is essential for understanding the bigger picture.

Current Mortgage Rates on July 1, 2025: A Closer Look at Loan Types

Let's break down exactly where mortgage rates stand as of today, July 1, 2025. According to Zillow data, we're seeing some movement across different loan types. Understanding these nuances can help you choose the right mortgage for your specific needs.

Here's a table summarizing the current rates for conforming loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.74%	down 0.05%	7.18%	down 0.06%
20-Year Fixed Rate	6.01%	down 0.25%	6.36%	down 0.27%
15-Year Fixed Rate	5.71%	down 0.10%	5.99%	down 0.12%
10-Year Fixed Rate	5.62%	down 0.07%	5.77%	down 0.23%
7-year ARM	7.00%	down 0.14%	7.91%	up 0.09%
5-year ARM	7.59%	up 0.13%	7.98%	up 0.05%
3-year ARM	—	0.00%	—	0.00%

• 30-Year Fixed Rate: This is the most popular option because it offers a predictable monthly payment over a long period.
• 15-Year Fixed Rate: While the monthly payments are higher, you'll pay off your mortgage much faster and save a significant amount on interest over the life of the loan.
• Adjustable-Rate Mortgages (ARMs): These loans have interest rates that can change over time, based on market conditions. They can be attractive if you expect rates to fall, but they also carry more risk.

And here's a look at government-backed loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate FHA	6.75%	down 0.50%	7.78%	down 0.50%
30-Year Fixed Rate VA	6.19%	down 0.08%	6.35%	down 0.13%
15-Year Fixed Rate FHA	5.50%	down 0.77%	6.46%	down 0.78%
15-Year Fixed Rate VA	5.68%	down 0.09%	5.95%	down 0.17%

• FHA Loans: These loans are insured by the Federal Housing Administration and are often a good choice for first-time homebuyers or those with lower credit scores.
• VA Loans: These loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty military personnel, and surviving spouses.
• Comparing Conforming and Government Loans: When deciding between conforming and government loans, make sure the loan requirements fit your financial situation!

You'll notice that government loans, especially FHA and VA options, often offer attractive rates. This makes them a great choice for first-time homebuyers or those who qualify for these programs. Understanding the differences between these loan types is essential for making an informed decision.

Refinance Rates Today: July 1, 2025 – Is It Time to Refinance Your Mortgage?

For homeowners looking to refinance, there's some good news. Refinance rates are also showing a slight downward trend. This could be an opportunity to lower your monthly payments or shorten your loan term. Let's explore the potential benefits of refinancing.

Here's a snapshot of current refinance rates for conforming loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	7.03%	down 0.03%	7.18%	down 0.06%
20-Year Fixed Rate	6.02%	down 0.25%	6.37%	down 0.27%
15-Year Fixed Rate	5.71%	down 0.10%	6.00%	down 0.12%
10-Year Fixed Rate	5.63%	down 0.07%	5.78%	down 0.23%
7-year ARM	7.01%	down 0.14%	7.90%	up 0.09%
5-year ARM	7.59%	up 0.13%	7.97%	up 0.05%
3-year ARM	—	0.00%	—	0.00%

• Lower Monthly Payments: Refinancing to a lower interest rate can significantly reduce your monthly mortgage payments, freeing up cash for other expenses.
• Shorten Your Loan Term: Refinancing to a shorter loan term, such as from a 30-year to a 15-year mortgage, can help you pay off your mortgage faster and save on interest over the long run. This is a tough decision as monthly commitments drastically change.
• Switching Loan Types: You can also refinance to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, providing more stability and predictability in your monthly payments.
• Cash-Out Refinance: If you have equity in your home, you can refinance for more than you currently owe and use the extra cash for home improvements, debt consolidation, or other needs. This can be useful in times of need.

So, Will Mortgage Rates Drop Further in July 2025?

The big question everyone is asking is: Will mortgage rates drop in July 2025? Well, according to top financial experts it is unlikely to see any major rate drops in coming weeks. Most forecasts show mortgage rates staying in approximately the same place. But it's also important to consider other factors that may indirectly affect mortgage rates, such as The Federal Reserve.

Here's a look at predictions from different sources:

• Long Forecast: Expects an average rate of around 6.71% in July 2025, potentially dipping to 6.68% by the end of the month.
• Mortgage Bankers Association (MBA): Anticipates rates hovering around 6.7% for the third quarter of 2025 (July, August, September).
• Other Experts: Major players like Fannie Mae are suggesting rates could fall to around 6.1% by the end of 2025. Wells Fargo anticipates rate dropping to 6.5% by the end of 2025.

Source	Mortgage Rate Prediction for July 2025 (30-year fixed)
Long Forecast	6.71% average, closing at 6.68%
Mortgage Bankers Association (MBA)	6.7% average in Q3 2025
National Association of Home Builders (NAHB)	Mid-6% range by end of 2025
Fannie Mae	6.1% by end of 2025
Wells Fargo	~6.5% by end of 2025

It's important to remember that these are just predictions, and actual mortgage rates can be influenced by a variety of factors.

The Federal Reserve's Impact on Mortgage Rates

The Federal Reserve (The Fed) plays a huge part in how mortgage rates move. They manage the federal funds rate, which influences all sorts of interest rates. Understanding the Fed's actions and policies is crucial for predicting future mortgage rate trends.

The Fed's most recent meeting in June 2025 concluded with no changes to the federal funds rate, remaining between 4.25% and 4.50%. But they might make two rate decreases to bring down rates by the end of 2025. Others think rates might stay unchanged. These differing perspectives highlight the uncertainty surrounding future rate movements.

Pay attention to the next meeting (July 30, 2025). If the Fed cuts rates, that might lower mortgage rates a bit in late July or early August. If the Fed is still worried about inflation, any rate cuts might not be that big. The Fed's decisions are driven by a complex interplay of economic factors, including inflation, employment, and economic growth.

Inflation: A Key Driver of Mortgage Rates

Inflation can really influence mortgage rates. Usually, higher inflation means higher interest rates. In May 2025, the Consumer Price Index (CPI) rose 2.4% over the past year. This might make it less likely that the Fed will give us big rate cuts. Keeping an eye on inflation data is critical.

The Fed expects PCE inflation to be around 3.0% for 2025, and core PCE inflation at 3.1%. Both are still higher than the Fed's 2% goal. This inflationary pressure could limit the Fed's ability to lower rates significantly.