Mortgage Rates Today: The States Offering Lowest Rates – July 25, 2025

Are you dreaming of owning a home but worried about mortgage rates? You're not alone! It's a big decision and knowing where to find the best deals can make all the difference. As of July 25, 2025, the states boasting the cheapest 30-year new purchase mortgage rates are New York, California, Pennsylvania, Massachusetts, New Jersey, Washington, and North Carolina, with rate averages ranging from 6.72% to 6.86%. Let's dive into what's driving these rates and what it means for you.

Mortgage Rates Today: The States Offering Lowest Rates

Why Do Mortgage Rates Vary by State?

It's a question I get asked a lot. Why isn't there just one national rate? Several factors contribute to these differences which I feel everyone should be aware of. Here's the inside scoop:

• Lender Presence: Not all lenders operate in every state. Those that do might prioritize specific regions due to existing infrastructure or market strategies.
• Credit Score Averages: States with higher average credit scores may see slightly lower rates overall, as lenders perceive less risk.
• Average Loan Size: The size of the average mortgage in a state can also affect rates. For example, states with higher property values tend to have larger loan sizes.
• State Regulations: Mortgage lending is regulated at both the federal and state levels. Some states may have more stringent requirements or consumer protection laws, which can influence lender behavior and, ultimately, rates.
• Risk Management: Lenders have their own unique ways of assessing and managing risk. Some might be more aggressive in certain markets, while others might be more conservative.

Today's Snapshot: Who's Got the Best and Worst Rates?

Alright, let's get specific. As I mentioned, the national average for a 30-year fixed-rate mortgage is currently around 6.89%. According to Investopedia's report and Zillow's data, here's a quick view of the states with the lowest and highest rates as of Thursday:

States with Lowest 30-Year Mortgage Rates

State	Rate
New York	6.72%
California	6.78%
Pennsylvania	6.80%
Massachusetts	6.82%
New Jersey	6.84%
Washington	6.85%
North Carolina	6.86%

States with Highest 30-Year Mortgage Rates

State	Rate
Alaska	6.94%
West Virginia	6.95%
Mississippi	6.96%
Washington, D.C.	6.97%
Kentucky	6.98%
Iowa	6.99%
Kansas	7.00%
South Carolina	7.00%
Wyoming	7.01%

It's worth noting that even within a state, rates can vary significantly depending on the lender and your individual financial situation. Always, always shop around!

Don't Be Fooled: Understanding Average vs. “Teaser” Rates

You've probably seen ads with incredibly low mortgage rates—the kind that make you do a double-take. These are often “teaser” rates, and they come with a catch. Here's what to watch out for:

• Points: To get the advertised rate, you might have to pay “points” upfront. One point equals 1% of the loan amount, so it can add up quickly.
• Credit Score Requirements: The lowest rates are usually reserved for borrowers with exceptional credit scores. If your credit isn't perfect, you'll likely pay a higher rate.
• Loan Size Limitations: Some lenders offer lower rates only on smaller or larger loan amounts.
• Hypothetical Borrowers: The rates may be based on a borrower with a smaller-than-typical loan.

The rates I'm sharing here are averages, which gives you a more realistic picture of what you can expect. Your actual rate will depend on your unique circumstances.

Navigating the National Rate Trends

This year has been a rollercoaster. Looking at the big picture, national mortgage rates are still lower than the mid-May high of 7.15%. I remember back in March, 30-year rates even dipped to 6.50%, the lowest average of the year. And who can forget last September when rates plunged to a two-year low of 5.89%? Those were the days!

Understanding the Fed's Role: Rate Cuts and Economic Influences

The Federal Reserve plays a HUGE role in setting the stage for mortgage rates. Here's the latest:

• Recent Fed Actions: The Fed cut rates three times in late 2024 (September to December), bringing the federal funds rate down to a target range of 4.25%–4.5%.
• 2025 Outlook: Further cuts are expected in the coming years. The median projection is that the federal funds rate will fall to 3.9% by the end of 2025. The Fed intends two rate cuts this year, but when and how large are still up for discussion.
• Key Influences on Fed Policy: Factors like tariffs, inflation, and economic slowdown are all on the Fed's radar.
• Tariffs and Inflation: Fed Chair Jerome Powell anticipates inflation from tariffs, which complicates the timing of rate cuts.
• GDP growth is projected at 1.4% for 2025, so an economic slowdown might push the Fed to cut rates this year.

If the Fed follows through on planned cuts, analysts predict that the 30-year mortgage rate could decline as low as 5% by 2028.

The takeaway? Keep an eye on the Fed! Their decisions have a ripple effect on mortgage rates and your home-buying power.

Other Factors to Consider to Secure the Best Deal In Today's Market

• Your Credit Score: This is a big one. The higher your credit score, the lower the interest rate you'll likely qualify for.
• Your Down Payment: A larger down payment not only reduces the amount you need to borrow but can also signal to lenders that you're a lower-risk borrower.
• Your Debt-to-Income Ratio (DTI): Lenders will look at how much of your monthly income goes toward debt payments. A lower DTI is generally more favorable.
• The Type of Loan: Different types of loans (e.g., conventional, FHA, VA) come with different rates and requirements.

I can't stress this enough: shop around! Get quotes from multiple lenders. Don't be afraid to negotiate. Even a small difference in interest rate can save you thousands of dollars over the life of the loan.

Understanding the Mortgage Landscape Beyond 30-Year Fixed Rates

While the 30-year fixed-rate mortgage is the most popular, it's not the only option. Here's a quick rundown of other loan types:

• FHA 30-Year Fixed: Often favored by first-time homebuyers, these loans are insured by the Federal Housing Administration and typically have lower down payment requirements. Rates averaged 7.55%
• 15-Year Fixed: With a shorter term, you'll pay off the loan faster and save on interest. Expect rates of 5.92%
• Jumbo 30-Year Fixed: For loan amounts that exceed conforming loan limits. Rates are at 6.80%
• 5/6 ARM (Adjustable-Rate Mortgage): These loans have a fixed rate for the first five years, then adjust every six months based on market conditions. Rates hover around 7.35%.

Calculate Your Mortgage Payments

Now, all this talk about rates is meaningless if you don't know how it affects your monthly payments. To get a sense of what you can afford, play around with a mortgage calculator.

Input your desired home price, down payment, loan term, and estimated interest rate to see how much your monthly payments would be. Most calculators also factor in property taxes and homeowners insurance, giving you a more complete picture of your total housing costs.

And as you explore different loan scenarios, remember that you can always get a lower upfront rate with a variable rate. This is worth consideration, however, I advise borrowers to educate themselves on the implications of a variable rate mortgage.

Final Thoughts

Buying a home is one of the biggest financial decisions you'll ever make. By understanding Mortgage Rates Today – including the different rates that exist in New York, California, Pennsylvania, Massachusetts, New Jersey, Washington, and North Carolina – you can make smarter and more informed decisions. Keep shopping!