Mortgage Rates Today: The States Offering Lowest Rates – July 2, 2025

Okay, here's the lowdown on where to find the most appealing mortgage rates in the U.S. as of July 2, 2025: If you're shopping for a 30-year fixed rate mortgage for a new home purchase, you might want to focus your search in New York, Massachusetts, Colorado, Connecticut, Florida, New Jersey, California, Texas, and Washington. These states are currently showing refinance averages between 6.36% and 6.72%. Keep reading to discover which states have the highest rates and why rates vary so dramatically across the country.

U.S. States With Lowest Mortgage Rates Today – July 2, 2025

Why Mortgage Rates Vary by State

Mortgage rate game can feel a little bit like a rollercoaster. It's exciting when rates dip, but it can also be frustrating when they climb without any warning. One of the things I've learned over the years is that what you hear about national mortgage rates is often only half the story. The reality is that rates can vary significantly from one state to another. So, what's behind this state-by-state rate variation? It boils down to a number of things:

• Lender Presence: Different lenders are more active in different states. This means the level of competition varies. More competition generally leads to better rates for you.
• Credit Score Averages: The average credit score of borrowers in a state can influence rates. States with higher average credit scores may be perceived as lower-risk, leading to slightly better rates.
• Average Loan Size: The average amount people borrow can also affect interest rates, as a large average can lead to bigger fluctuations.
• State Regulations: Each state has its own set of regulations and consumer protection laws that can influence how lenders operate and, ultimately, the rates they offer.
• Risk Management Strategies: Lenders each have their own way of accessing how likely they are to have their money paid back, and this affects interest rate offers.

Ultimately, my advice is to not get too caught up in national averages. Your rate will be individual and impacted by the averages in your area. So do your research!

States With the Lowest 30-Year Mortgage Rates Today – July 2, 2025

If you’re in the market for a home loan right now, this data from July 2, 2025, might be worth taking into consideration. Here’s a snapshot of the states with the lowest and highest 30-year new purchase mortgage rates, according to Investopedia's analysis and Zillow's data. These states are offering some of the most favorable mortgage rates in the nation.

• New York: This state often sees competitive rates due to the presence of numerous lenders and a generally strong housing market, although prices are inflated.
• Massachusetts: Like New York, Massachusetts has a robust financial sector and competitive lending environment.
• Colorado: With its growing population and economy, Colorado attracts a good mix of lenders, contributing to favorable rates.
• Connecticut: Connecticut's housing market, particularly in certain areas, can drive competition among lenders.
• Florida: Despite the rising insurance costs and natural disaster risk, has been a long-time favorite for competitive rates.
• New Jersey: New Jersey sees strong lender competition in its densely populated areas, leading to lower rates.
• California: California’s enormous housing market forces lenders to offer competitive deals to win business.
• Texas: The booming housing market in Texas keeps lenders competitive, resulting in generally lower rates.
• Washington: The tech industry boom in Seattle and other areas drives economic activity and competition among lenders.

This translates to average refinance rates ranging from approximately 6.36% to 6.72%. Keep in mind that these are averages, and your individual rate will depend on your unique financial situation.

States With the Highest 30-Year Mortgage Rates Today – July 2, 2025

On the other end of the spectrum, some states consistently have higher average mortgage rates. As of July 2, 2025, these states are registering the highest rates:

• Alaska
• West Virginia
• Nebraska
• Kansas
• Montana
• North Dakota
• Rhode Island

These states are registering refinance averages from roughly 6.84% to 6.93%.

These higher rates can be attributed to several factors, including:

• Lower Population Density: Sparsely populated states may have fewer lenders, reducing competition.
• Smaller Housing Markets: Less active housing markets might not attract as much lender interest.
• Economic Factors: Local economic conditions and risks can influence lender pricing.

National Mortgage Rate Trends

Looking at the big picture, the national average rate for a 30-year fixed-rate mortgage is hovering around 6.76% as of July 2, 2025. This is near of a 3-month low, and a little bit better than the rates we saw in mid-May, when things peaked at 7.15%. However, we're still not quite back to the lows we saw earlier in the year, with rates averaging 6.50% in March and a 2-year low of 5.89% in September of the previous year.

Here’s a quick snapshot of national averages across different loan types:

Loan Type	Average Rate
30-Year Fixed	6.76%
FHA 30-Year Fixed	7.55%
15-Year Fixed	5.71%
Jumbo 30-Year Fixed	6.74%
5/6 ARM	7.35%

Source: Zillow Mortgage API

Understanding Those “Teaser” Rates

Let's talk about something important: those super-low mortgage rates you see advertised online. As someone who's spent years watching the mortgage market, I can tell you that these rates often come with strings attached. They're kind of like the “sale” price at a store – it might look great at first glance, but once you dig into the details, you realize it's not quite as good as it seems.

These advertised rates, often called “teaser rates,” are carefully chosen to be as attractive as possible. However, they might require you to pay points upfront, have an exceptional credit score, or take out a smaller loan than you need. Remember, the rate you actually qualify for will be based on your individual circumstances, which can be quite different from the hypothetical scenarios used to promote those teaser rates.

What are “points” upfront, you ask? Well, paying a “point” means you pay 1% of your mortgage up front in order to lower your interest rates. It can sometimes be worthwhile, but you won't know until you actually go through the mortgage process.

Factors That Influence Mortgage Rates

Mortgage rates aren’t just pulled out of thin air. They’re influenced by a complex mix of economic factors. Here are some of the key drivers:

• Bond Market: Mortgage rates tend to follow the direction of the bond market, especially the 10-year Treasury yield. When bond yields rise, mortgage rates often follow suit.
• Federal Reserve Policy: The Federal Reserve's monetary policy plays a huge role. The Fed's actions, such as buying bonds or adjusting the federal funds rate, can significantly impact mortgage rates.
• Competition: The level of competition among mortgage lenders can also influence rates. More competition generally leads to lower rates for borrowers.

It's worth noting that the Fed had reduced the federal funds rate in both November and December of the previous year, so there's a possibility that we could see mortgage rates decrease even further in the coming months.

How to Find the Best Mortgage Rate

Alright, so what can you do to snag the lowest possible mortgage rate? Here’s my advice:

• Shop Around: Don't settle for the first rate you see. Get quotes from multiple lenders to compare.
• Improve Your Credit Score: A higher credit score can qualify you for a better rate.
• Save for a Larger Down Payment: A bigger down payment can reduce your loan-to-value ratio, which may result in a lower rate.
• Consider Different Loan Types: Explore different loan options, such as 15-year fixed-rate mortgages or adjustable-rate mortgages, to see if they might be a better fit for your situation. However, beware that you will likely be paying a lot more on your monthly bill with a 15-year plan, and an adjustable rate mortgage can go up.
• Negotiate: Don't be afraid to negotiate with lenders to see if they can match or beat a competitor's offer.

Final Thoughts

While national trends and news headlines offer some insight into the mortgage market, understanding the nuances of mortgage rates at the state level can be super beneficial. By knowing which states typically offer lower rates and understanding the factors that influence those rates, you can make more informed decisions and potentially save money on your home loan.