Mortgage Rates Today, Nov 18: 30-Year Fixed Refinance Rate Drops Slighty

The latest data from Zillow reveals that today, November 18, 2025, the national average for a 30-year fixed refinance rate has seen a modest drop of 2 basis points, settling at 6.81%. While this might seem like a small change, it's a welcome sign for homeowners looking to potentially lower their monthly payments.

These small shifts can sometimes be the beginning of something bigger, or they can just be a brief pause in the overall trend. Right now, it feels like we're in one of those “pause” moments. After a period of more significant drops following the Federal Reserve's rate cuts earlier this year, rates have been holding pretty steady. This 2-basis point dip is a subtle nudge, not a dramatic plunge, but it's still something to pay attention to.

Mortgage Rates Today, Nov. 18: A Slight Dip in 30-Year Fixed Refinance Rates

What Does That 2 Basis Point Drop Really Mean for Your Wallet?

Let's break down what this small change translates to. A basis point is essentially 0.01%, so a 2-basis point drop means the rate is down by 0.02%. For a large loan, this can add up over time.

Imagine you're refinancing a $300,000 loan.

• At 6.83% (the previous week's rate), your monthly principal and interest payment would be approximately $1,960.
• At 6.81% (today's rate), your monthly principal and interest payment would be roughly $1,957.

That's a saving of about $3 per month. Now, that might not sound like a lot on its own. But over the life of a 30-year mortgage, those small savings accumulate. And more importantly, it signals a slight cooling of rates, which could be good news.

Beyond the Numbers: What's Driving These Rates?

It's easy to just look at the numbers and see if they're up or down, but understanding why is crucial. Several factors are swirling around right now, creating a bit of a guessing game for mortgage rates.

The Federal Reserve's Influence: As mentioned, the Fed made two 25-basis point cuts to the federal funds rate in September and October 2025. Typically, when the Fed lowers its benchmark rate, we expect mortgage rates to follow suit. However, the connection isn't always direct. Mortgage rates are more closely influenced by the bond market, specifically the market for mortgage-backed securities. While the Fed's actions can certainly impact investor sentiment and, therefore, bond yields, other economic factors play a massive role. The inconsistency in how mortgage rates reacted to the Fed's past moves suggests that the market is still processing a lot of information.

Inflation and Economic Data: The Big Unknowns: This is where things get really interesting, and frankly, a bit bumpy. We're all waiting with bated breath for key economic reports, especially jobs numbers and inflation data for November. Keep in mind that earlier this year, a government shutdown caused some delays in these reports, adding to the market's uncertainty.

• If inflation continues to cool down, signaling that the economy is stabilizing without overheating, this is generally good news for mortgage rates. Lower inflation means the purchasing power of money isn't eroding as quickly, making fixed-income investments like bonds more attractive. This can lead to lower yields on those bonds, and subsequently, lower mortgage rates.
• However, if we see any signs of inflation reaccelerating, it could spook the markets. High inflation typically prompts the Fed to consider raising rates again, or at least holding them steady for longer. This would likely push mortgage rates back up.

Market Volatility: A Near-Term Reality: Given the economic uncertainties and the ongoing policy adjustments by governments and central banks worldwide, most experts anticipate that mortgage rates will remain somewhat volatile for the foreseeable future. This means we might continue to see small ups and downs, much like we're experiencing today, rather than a steady, predictable trend.

Refinancing: Is Now the Right Time for You?

This is the million-dollar question, and the answer is almost always: it depends. While the 30-year fixed rate is sitting at 6.81%, and the 15-year fixed rate is holding steady at 5.75%, and the 5-year ARM is at 7.44%, your personal financial situation is the most important factor.

Here are some of the key things to consider:

• How long do you plan to stay in your home? If you're planning to move in a few years, taking on the costs of refinancing might not be worth it for a small monthly saving. However, if you plan to stay put long-term, even a small rate reduction can lead to significant savings over the years.
• What is your credit score? Your credit score is one of the biggest determinants of the interest rate you'll qualify for. Generally, a higher credit score will get you a lower rate. If your credit has improved since you took out your current mortgage, refinancing could be a smart move.
• How much equity do you have in your home? Lenders look at your loan-to-value (LTV) ratio. If you have a lot of equity, you're generally in a better position to refinance.
• Are you looking for specific goals? Sometimes, people refinance not just to lower their rate but for other reasons, like taking out cash for renovations or debt consolidation.

A Note on Different Mortgage Types:

It's important to remember that today's rates apply to various mortgage products:

• 30-Year Fixed-Rate Mortgage: This is the most common type. Your interest rate stays the same for the entire 30 years, offering payment stability. Today's average is 6.81%.
• 15-Year Fixed-Rate Mortgage: This loan has a shorter term, meaning higher monthly payments but you'll pay less interest overall and own your home faster. The average rate today is 5.75%. This rate is significantly lower than the 30-year fixed, which is typical.
• Adjustable-Rate Mortgage (ARM): These loans start with a lower interest rate for an initial period (e.g., 5 years) and then adjust periodically based on market conditions. The average 5-year ARM refinance rate is 7.44%. As you can see, ARMs are currently higher than fixed rates, which is an interesting shift from previous years. This highlights how market dynamics can change quickly.

Key Factors Influencing Your Refinance Eligibility

Beyond the national averages, lenders will assess your eligibility based on several critical factors. It's not just about the market; it's about your personal financial health.

• Credit Scores: As I mentioned before, this is paramount. Lenders want to see a history of responsible borrowing. Generally, scores in the mid-700s and above are needed for the best rates. If your score is lower, it might be worth working on improving it before applying.
• Debt-to-Income Ratio (DTI): This compares your monthly debt payments (including your potential new mortgage) to your gross monthly income. Lenders prefer a DTI of 43% or lower, but some programs have higher allowances.
• Income and Employment Stability: You'll need to demonstrate a steady and reliable income source. Lenders typically want to see at least two years of employment history in the same field.
• Home Appraisal: The lender will order an appraisal to determine the current market value of your home. This is crucial for establishing your loan-to-value ratio.

The Benefits of Refinancing for Different Homeowners

Refinancing isn't a one-size-fits-all solution, but it can be particularly beneficial for certain groups.

• First-Time Homeowners: Many first-time buyers take out 30-year mortgages at prevailing rates. If rates drop significantly after they've owned the home for a few years and their credit has improved, refinancing can help them lock in a lower rate and reduce their monthly burden, freeing up cash for other life goals.
• Homeowners with Improved Credit: If your credit score has gone up since you purchased your home, you're likely eligible for better rates than you secured initially.
• Those Needing Cash: A cash-out refinance allows you to borrow more than you owe on your mortgage and take the difference in cash. This can be useful for home improvements, consolidating high-interest debt, or covering other large expenses. However, it also increases your loan amount and monthly payment, so it's a decision that requires careful consideration.

The Pros and Cons of Cash-Out Refinancing

Let's delve a little deeper into cash-out refinances, as they're a popular tool but come with their own set of considerations.

Pros:

• Access to Funds: Provides a way to tap into your home's equity for significant expenses.
• Potentially Lower Interest Rates: The interest rate on a cash-out refinance is often lower than that of personal loans or credit cards, especially for debt consolidation.
• Tax Deductibility (with caveats): Interest on a mortgage used for home improvements or to buy, build, or substantially improve your home may be tax-deductible. Always consult a tax professional.

Cons:

• Increased Loan Amount and Payments: You'll be borrowing more money, which means a higher principal balance and likely a higher monthly payment.
• Longer Repayment Term: You're essentially taking out a new, larger mortgage.
• Risk to Your Home: Your home serves as collateral. If you can't make your payments, you risk foreclosure.

Understanding Adjustable-Rate Mortgages (ARMs)

While fixed-rate mortgages offer predictability, ARMs can be attractive for certain borrowers, especially if you anticipate moving or refinancing again before the introductory period ends.

• Initial Lower Rate: The primary appeal is the lower interest rate during the fixed period (e.g., the first 5 years of a 5/1 ARM).
• Risk of Rising Payments: After the fixed period, your rate will adjust periodically based on market indices. If rates go up, your monthly payments will increase, possibly significantly.
• Current ARM Rates: It's noteworthy that today, the 5-year ARM rate (7.44%) is higher than the 30-year fixed rate (6.81%). This is a somewhat unusual situation and suggests that lenders are pricing in a higher expectation for future rate increases, making the stability of a fixed-rate loan more appealing right now for many.

Looking Ahead: What's Next for Mortgage Rates?

Predicting mortgage rates with absolute certainty is like trying to catch lightning in a bottle. However, based on the current economic climate and expert opinions, I anticipate continued volatility in the short term.

The upcoming economic data will be crucial. If inflation continues its downward trend and the job market remains stable without showing signs of overheating, we might see further gradual declines or at least stability in mortgage rates. Conversely, any surprises on the inflation front or signs of economic cooling could lead to renewed upward pressure.

For homeowners considering a refinance, my advice is to stay informed, keep an eye on these key economic indicators, and more importantly, understand your personal financial goals and risk tolerance.