States With Lowest Mortgage Rates Today – May, 16 2025

If you're looking to buy a home today, May 16, 2025, you're probably wondering where you can find the lowest mortgage rates. The states offering the cheapest 30-year mortgage rates for new purchases are currently New York, California, Florida, Texas, Georgia, Michigan, and North Carolina. These states are seeing average rates between 6.85% and 7.02%. On the other hand, states like Alaska, West Virginia, Wyoming, South Dakota, Vermont, Iowa, Montana, North Dakota, and Washington, D.C. have higher rates, ranging from 7.10% to 7.17%.

States With Lowest Mortgage Rates Today – May, 16 2025

Buying a home is a big decision, and getting the best mortgage rate can save you thousands of dollars over the life of your loan. As someone who's navigated the mortgage process before, I know how overwhelming it can be. Let's dive into why these rates vary and what you can do to secure the best possible mortgage for your dream home.

Why Do Mortgage Rates Vary by State?

It's not just about location, location, location when it comes to mortgage rates. Several factors contribute to the differences you see across states:

• Lender Presence: Not all lenders operate in every state. The availability of different lenders creates competition, which can drive rates down in some areas.
• Credit Scores: Average credit scores vary from state to state. States with higher average credit scores might see slightly better rates.
• Average Loan Size: In areas with higher home prices, the average loan size tends to be larger. This can influence the risk assessment of lenders and, consequently, the rates they offer.
• State Regulations: Each state has its own set of regulations regarding mortgage lending, which can affect the costs and risks for lenders.
• Risk Management Strategies: Lenders have different ways of managing risk. Some might be more aggressive in offering lower rates to attract borrowers, while others might be more conservative.

Ultimately, it boils down to supply and demand, as well as the perceived risk associated with lending in a particular area.

National Mortgage Rate Averages: A Snapshot

Let's take a look at the national mortgage rate averages as of today (Source: Zillow):

Loan Type	New Purchase
30-Year Fixed	7.04%
FHA 30-Year Fixed	7.37%
15-Year Fixed	6.09%
Jumbo 30-Year Fixed	7.04%
5/6 ARM	7.29%

While these are national averages, remember that your individual rate will depend on your financial situation and the specific lender you choose.

A Look Back: Rate Trends in 2025

The mortgage rate environment has been anything but stable this year. Remember back in March when 30-year rates hit a low of 6.50%? That was the cheapest we saw all year. Then in mid-April, we experienced a surge, reaching 7.14%, the highest since May of last year.

Here's a quick recap of 30-year fixed-rate trends in 2025:

• March: Rates dipped to 6.50%.
• Mid-April: Rates surged to 7.14%.
• Today (May 16): Rates average 7.04%.

Don't Be Fooled by “Teaser Rates”

You've probably seen those incredibly low mortgage rates advertised online. Be cautious! These “teaser rates” often come with strings attached. They might require you to pay points upfront, have an exceptionally high credit score, or take out a smaller-than-typical loan.

The rate you ultimately get will depend on factors like:

• Your credit score: A higher score typically means a lower rate.
• Your income: Lenders want to see that you can comfortably afford your mortgage payments.
• Your down payment: A larger down payment can lower your risk in the eyes of the lender.
• Your debt-to-income ratio: This compares your monthly debt payments to your gross monthly income.
• The type of loan you choose: Fixed-rate mortgages tend to be more predictable, while adjustable-rate mortgages (ARMs) can fluctuate.

What's Driving Mortgage Rate Fluctuations?

Mortgage rates aren't determined by magic. They're influenced by a complex interplay of factors:

• The Bond Market: Keep an eye on 10-year Treasury yields. These often move in tandem with mortgage rates.
• The Federal Reserve: The Fed's monetary policy, particularly its bond-buying activities, has a significant impact.
• Competition: The more lenders vying for your business, the better your chances of getting a competitive rate.
• Inflation: Persistent inflation pressures typically lead to higher interest rates, including mortgage rates.

The Federal Reserve aggressively raised the federal funds rate to combat the high inflation rates that occurred in 2022 and 2023. That benchmark rate went up by 5.25 percentage points over the course of 16 months. By late 2023, the Fed decided to hold the rates steady but recently announced their first rate cut of 0.50 percentage points.

The central bank is scheduled to hold a total of eight rate-setting meetings per year, so we may see more rate-hold announcements in 2025.

Shopping Around is Key

I cannot stress this enough: shop around! Don't settle for the first rate you're offered. Get quotes from multiple lenders and compare them carefully. Even a small difference in the interest rate can save you a substantial amount of money over the life of the loan.

Calculate Your Monthly Mortgage Payment

Here's a basic illustration of how your monthly mortgage payment can be calculated for a house. You can use a mortgage calculator to estimate your payment based on the following information:

• Home Price: $440,000
• Down Payment: $88,000 (20%)
• Loan Term: 30 years
• APR: 6.67%
• Monthly Payment: $2,649.04
• Principal & Interest: $2,264.38
• Property Taxes: $256.67
• Homeowners Insurance: $128.00
• Mortgage Size: $352,000.00
• Mortgage Interest: $463,176.16
• Total Mortgage Paid: $815,176.16

The Bottom Line: Stay Informed and Shop Around

Navigating the mortgage market can be tricky, but knowledge is power. By understanding the factors that influence mortgage rates and taking the time to shop around, you can increase your chances of securing the best possible deal on your new home. The current states with the lowest mortgage rates are New York, California, Florida, Texas, Georgia, Michigan, and North Carolina, but your individual rate will still depend on your unique financial situation. Good luck with your home buying journey!