As of May 20, 2025, mortgage rates have seen a significant increase, largely influenced by Moody's recent downgrade of the U.S. credit rating. The 30-year fixed mortgage rate now stands at 6.85%, while the 15-year fixed mortgage rate is at 6.07%. The rise in these rates can be attributed to the increased risk perceptions among investors following the downgrade, which has notably affected the yield on U.S. Treasury bonds and, consequently, mortgage rates.

Today's Mortgage Rates – May 20, 2025: Rates Jump Post Moody's Credit Downgrade

Key Takeaways

• Current Rates: 30-year fixed at 6.85%, 15-year fixed at 6.07%.
• Refinance Rates: 30-year refinance now at 6.90%.
• Market Influence: Rates are expected to remain elevated due to continued economic uncertainty.
• Credit Downgrade Impact: Moody's downgrade spurred worries regarding government debt levels, affecting market stability.

With the upward trajectory of mortgage rates, potential homebuyers and current homeowners looking to refinance are confronted with a challenging landscape. In this article, we’ll explore the current rates in detail, the factors influencing these changes, and what it means for borrowers.

Current Mortgage Rates as of May 20, 2025

The mortgage market has been particularly volatile, and current data from Zillow outlines the following national average rates for a range of mortgage products:

Mortgage Type	Current Rate (%)
30-Year Fixed	6.85%
20-Year Fixed	6.44%
15-Year Fixed	6.07%
5/1 Adjustable Rate Mortgage (ARM)	7.17%
7/1 Adjustable Rate Mortgage (ARM)	7.38%
30-Year VA	6.38%
15-Year VA	5.71%
5/1 VA	6.35%

For those considering refinancing, the rates are slightly higher, reflecting the current market pressures:

Refinance Type	Current Rate (%)
30-Year Fixed	6.90%
20-Year Fixed	6.71%
15-Year Fixed	6.18%
5/1 ARM	7.50%
7/1 ARM	7.43%
30-Year VA	6.57%
15-Year VA	6.24%
5/1 VA	6.32%

(Data sourced from Zillow).

Understanding the Recent Rate Increases

The recent spike in mortgage rates is primarily linked to a decision by Moody's to downgrade the U.S. government's credit rating from Aaa to Aa1. This rating downgrade was prompted by concerns over increasing national debt levels and fiscal stability. Moody's noted, “over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat,” which raises alarms for investors and lenders alike.

When investors perceive greater risk associated with U.S. government debt, yields on Treasury bonds rise. Because mortgage rates tend to follow these yields, any increase results in higher rates for prospective homebuyers and refinancers.

Current Market Sentiment and Trends

As of last week, the bond market reacted similarly to other economic factors, such as inflation expectations and ongoing geopolitical tensions. Given the interconnectedness of these factors, mortgage rates remain vulnerable to shifts in the economic landscape. Recently, concerns over inflation have heightened, making policymakers cautious in their approach. Economists and market analysts are in near consensus that rates might not only hold steady but could rise further in response to global economic conditions.

The Federal Reserve's decisions also play a crucial role in shaping mortgage rates. Notably, economists do not anticipate significant drops in mortgage rates before the end of 2025. In fact, many forecasters, including the Mortgage Bankers Association (MBA), project that the 30-year fixed mortgage rate could hover around 6.5% to 7.0% in the second half of the year. The Fed's current approach suggests they may prioritize controlling inflation over providing immediate relief to borrowers through lower rates.

Factors Influencing Mortgage Rates Beyond Credit Ratings

While the credit downgrade is a significant factor affecting mortgage rates, other elements also play a vital role:

1. Economic Growth Indicators: Reports on GDP growth, consumer spending, and business investment provide insight into the economy's strength. A robust economy can lead to rising inflation, prompting the Fed to increase interest rates to cool off price increases.
2. Job Market Dynamics: The labor market's health has direct implications on interest rates. An unemployment rate that stays low usually indicates higher consumer spending and investments, heightening inflation concerns. Conversely, weakening job growth could prompt a Fed response to lower rates in a bid to stimulate the economy.
3. Geopolitical Tensions: Events abroad that affect energy prices or economic sanctions on major economies can ripple through to American markets, affecting borrower sentiment and rates. The interplay of international events with domestic economic health keeps lenders on their toes.
4. Inflation Data: Economic news regarding inflation bears significant weight on the Fed's decisions. Rising inflation generally leads to higher mortgage rates as lenders seek to offset the expected decline in money's purchasing power.
5. Housing Market Fundamentals: The dynamics of supply and demand in the housing market can exert upward pressure on rates. When housing inventory is low, prices rise, which can also affect how lenders view risk and set rates.
6. Investor Sentiment: At its core, the mortgage market is deeply intertwined with investor sentiment. As risk appetite changes, lenders may raise rates to account for perceived risks in a volatile economic environment.

Expected Trends in Mortgage and Refinance Rates

The economic outlook is uncertain, but projections suggest that borrowers may find mortgage rates fluctuating around the levels witnessed today. For example:

Forecasting Entity	Q2 2025	Q3 2025	Q4 2025	Q1 2026
Fannie Mae	6.5%	6.3%	6.2%	6.1%
MBA	7.0%	6.8%	6.7%	6.6%

These forecasts provide a framework for understanding how rates may evolve influenced by a mixture of domestic fiscal policy, inflationary pressure, and shifts in economic growth expectations.

Comparative Analysis: Fixed vs. Adjustable-Rate Mortgages

When selecting between fixed-rate and adjustable-rate mortgages (ARMs), potential buyers should weigh the inherent risks and benefits. Fixed-rate mortgages grant borrowers the security of predictable monthly payments throughout the duration of the loan. Currently, the average rate for a 30-year fixed mortgage stands at 6.85%, while the 15-year fixed rate is significantly lower at 6.07%.

In contrast, ARMs often start at lower initial rates but transition to variable rates after a specified time, creating susceptibility to market fluctuations. For example, a 7/1 ARM offers a fixed rate for the first seven years but can adjust annually thereafter, currently sitting at 7.38%. Choosing this option can initially lower monthly payments; however, after the initial period, borrowers may face increased payments if rates rise.

Monthly Payment Example Calculations

Understanding how different rates influence monthly payments is crucial for borrowers. Below, we illustrate the distinction in payments between a 30-year and 15-year fixed-rate mortgage using a hypothetical mortgage amount of $400,000:

• 30-Year Fixed Mortgage
  • Rate: 6.85%
  • Monthly Payment: Approximately $2,621
  • Total Interest Paid: About $543,573 over 30 years
• 15-Year Fixed Mortgage
  • Rate: 6.07%
  • Monthly Payment: Approximately $3,391
  • Total Interest Paid: About $210,303 over 15 years

This stark difference illustrates how opting for a shorter loan term can lead to substantial savings on interest payments. For many borrowers, the allure of lower interest over time needs to be balanced against higher monthly payments; it's a decision that requires careful financial consideration and goal setting.

The Future of Mortgage Rates: A Delicate Balance

Looking ahead, the trajectory of mortgage rates will be tightly linked with various economic indicators, including inflation, employment rates, and the Federal Reserve's policy stance. Borrowers should remain vigilant, as any shifts in these factors could lead to further rate fluctuations.

Interestingly, the expected trajectory doesn’t just hinge on macroeconomic indicators but also the overall behavior of consumers. For instance, should consumer confidence wane, we might see a slowdown in home purchases, prompting lenders to offer more competitive rates to stimulate demand.

Conversely, should inflation persist and the job market strengthen, lenders may be compelled to raise rates further to maintain profitability and offset the rising costs of borrowing. It’s a complex chess game where all players, from borrowers to lenders to investors, seem engaged.

The nuances of the current market demand that potential homeowners and those thinking about refinancing stay informed about emerging trends and data-driven projections in order to make sound financial decisions. Those actively engaged in the market would benefit from reviewing their options frequently and consulting financial experts as necessary.

Looking for the best mortgage rates today? As of May 20, 2025, the states boasting the lowest 30-year new purchase mortgage rates are New York, California, New Jersey, Florida, Tennessee, Georgia, Pennsylvania, Texas, and Utah, with average rates hovering between 6.84% and 7.05%. But before you pack your bags and move, let's dive deeper into what this means for you and how to snag the best deal.

States With Lowest Mortgage Rates Today – May, 20 2025

Understanding Today's Mortgage Rate Scene

It's May 20th, 2025, and the mortgage market is still a bit of a rollercoaster. National averages for 30-year fixed-rate mortgages are sitting around 7.07%, which is a slight increase from recent weeks. We saw a dip down to 6.50% earlier in the year, but rates have been bouncing around quite a bit. It is always important to keep in mind that rates change frequently and are affected by several factors.

On the flip side, if you are in Alaska, West Virginia, Vermont, Iowa, South Carolina, or Wisconsin, you might find yourself paying a premium, with rates ranging from 7.12% to 7.25%.

Why Do Mortgage Rates Vary So Much by State?

You might be wondering, “Why the heck are mortgage rates so different from one state to another?” Good question! Several factors are at play.

• Lender Presence: Not all lenders operate in every state. Some focus on specific regions, which can affect competition and, therefore, rates.
• State-Level Regulations: Each state has its own set of rules and regulations regarding mortgages, which can impact the cost of doing business for lenders and influence the rates they offer.
• Credit Scores and Loan Sizes: The average credit score and loan size can vary significantly from state to state. Lenders assess risk based on these factors, and higher-risk areas might see higher rates.
• Risk Management Strategies: Lenders have different approaches to managing risk. Some might be more aggressive in offering lower rates to attract borrowers, while others might be more conservative.

National Mortgage Rate Averages (May 20, 2025)

Here’s a quick snapshot of national average mortgage rates for various loan types (Zillow):

Loan Type	New Purchase Rate
30-Year Fixed	7.07%
FHA 30-Year Fixed	7.37%
15-Year Fixed	6.09%
Jumbo 30-Year Fixed	7.06%
5/6 ARM	7.22%

Don't Fall for the “Teaser” Rate Trap!

You know those super-low mortgage rates you see advertised online? Be careful! These are often teaser rates that come with strings attached. They might require you to pay points upfront, have an ultra-high credit score, or take out a smaller-than-typical loan.

How to Get the Best Mortgage Rate in Your State

Alright, let's get down to brass tacks. Here's how you can increase your chances of securing the best mortgage rate, no matter where you live:

1. Shop Around: I cannot stress this enough. Get quotes from multiple lenders. Don't just settle for the first offer you receive.
2. Improve Your Credit Score: A higher credit score translates to a lower interest rate. Pay your bills on time, reduce your debt, and check your credit report for errors.
3. Save for a Larger Down Payment: A larger down payment reduces the lender's risk, which can lead to a better interest rate. Plus, you'll borrow less money overall.
4. Consider a Shorter Loan Term: A 15-year mortgage will have lower rates and you will save money on interest!

Understanding What Impacts Mortgage Rates

Mortgage rates are a complicated beast, influenced by a range of factors. Understanding these influences can help you anticipate rate movements and make informed decisions. Here are some key drivers:

• Bond Market Performance: Mortgage rates often track the yields of 10-year Treasury bonds. When bond yields rise, mortgage rates tend to follow suit, and vice versa.
• Federal Reserve Policy: The Federal Reserve's actions, particularly its monetary policy, play a crucial role. The Fed influences rates, which in turn, impacts mortgage rates.
• Competition Among Lenders: The level of competition between mortgage lenders can affect rates. In a highly competitive market, lenders may offer lower rates to attract borrowers.
• Economic Conditions: The overall health of the economy impacts mortgage rates. Strong economic growth can lead to higher rates as demand for borrowing increases.

The Fed's Recent Moves: A Quick Recap

The Federal Reserve's actions have had a significant impact on mortgage rates over the past few years. Here's a quick overview:

• Pandemic Response: In response to the pandemic, the Fed implemented policies to keep interest rates low, including purchasing bonds.
• Rate Hikes to Combat Inflation: Faced with rising inflation, the Fed aggressively raised interest rates to cool down the economy.
• Potential Rate Cuts on the Horizon: As of May 2025, the Fed has held rates steady, after several rate cuts towards the end of last year.

How Much Will Your Mortgage Cost?

Before you jump into the home-buying process, it's crucial to understand how much your monthly mortgage payment will be. Here are the key factors that determine your payment:

• Home Price: The more expensive the home, the higher your mortgage payment will be.
• Down Payment: A larger down payment reduces the amount you need to borrow, lowering your monthly payment.
• Loan Term: The longer the loan term, the lower your monthly payment will be, but you'll pay more interest over the life of the loan.
• Interest Rate: The interest rate significantly impacts your monthly payment. Even a small difference in the interest rate can save you thousands of dollars over the life of the loan.
• Property Taxes: Property taxes are typically included in your monthly mortgage payment.
• Homeowners Insurance: Homeowners insurance protects your home and is also included in your monthly payment.

Example:

Let's say you're buying a home for $440,000 and putting down $88,000 (20%). With a 30-year loan at a 6.67% interest rate, your estimated monthly payment would be around $2,649.04 (including principal, interest, property taxes, and homeowners insurance).

• 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*

Assuming a fixed interest rate.

Summary:

The mortgage market is constantly evolving, and staying informed is key to making smart financial decisions. While the states with the lowest mortgage rates might seem tempting, remember to consider your overall financial situation and long-term goals.

I hope this guide has given you a clearer understanding of today's mortgage rate scene and empowered you to make informed choices. Happy house hunting!

If you're in the market for a home, you might be sighing right now. Following Moody's recent credit downgrade of the U.S., 7% mortgage rates are back, adding another layer of complexity to an already challenging housing market. This means that the cost of borrowing money to buy a house just got more expensive, potentially impacting your buying power and monthly payments.

Mortgage Rates Surge to 7% After Moody's Credit Downgrade

What Happened? The Moody's Downgrade

On May 16, 2025, Moody's, a major credit rating agency, downgraded the U.S.'s credit rating from Aaa to Aa1. This essentially means that Moody's sees a slightly higher risk of the U.S. not being able to meet its financial obligations. Here's a quick breakdown:

• What is a credit rating? Think of it like a report card for a country's financial health.
• Why does it matter? A lower rating can make it more expensive for the U.S. government to borrow money.
• The reason for the downgrade: Moody's cited concerns about rising deficits, especially with potential tax cuts on the horizon. They estimate that proposed tax cuts could add a whopping $4 trillion to the federal deficit over the next decade.
• Ripple Effect: This downgrade sent ripples through the financial markets. The stock market dipped, and treasury yields (the interest rates on U.S. government bonds) went up. And, as we all know, where treasury yields go, mortgage rates often follow.

How It's Impacting Mortgage Rates

The increase in treasury yields has directly impacted mortgage rates. As of May 19, 2025, the average 30-year fixed-rate mortgage has climbed to 7.04%, according to Mortgage News Daily. While rates had been relatively stable, hovering just below 7% in recent weeks, this downgrade has pushed them back up.

Why Do Treasury Yields Affect Mortgage Rates?

This is a question I get asked all the time. Here’s the simplest way to think about it: Mortgage-backed securities (MBS) are bundles of mortgages that are sold to investors. These investors compare the returns on MBS to the returns on other investments, like Treasury bonds. If Treasury yields go up, MBS need to offer a higher return to attract investors. That higher return translates to higher mortgage rates for borrowers.

The Fed's Response (or Lack Thereof)

The Federal Reserve (the Fed) is in a tough spot. They're trying to balance fighting inflation with supporting economic growth. Recent tariff announcements and general economic uncertainty have made them hesitant to cut interest rates. Fed Chair Jerome Powell even admitted earlier this month that he “couldn’t confidently say” whether there will be rate cuts this year.

Adding to the uncertainty, Atlanta Federal Reserve President Raphael Bostic recently indicated he's leaning toward only one rate cut in 2025, citing concerns about inflation.

Impact on the Housing Market

This rate hike couldn't come at a worse time for the housing market. Existing home sales are sluggish. Redfin estimates that existing home sales stalled in April, with an annualized level of 4.196 million sales. That's down from April 2024 when mortgage rates were also in the 7% range. Pending sales have also declined, suggesting that May could be another slow month for completed sales.

Essentially, higher mortgage rates make homes less affordable, which can discourage potential buyers and slow down the market.

What Does This Mean for You?

If you're a prospective homebuyer, here's what you need to consider:

• Affordability: The most obvious impact is on affordability. A 7% mortgage rate means higher monthly payments, which could stretch your budget. I always advise potential buyers to carefully assess their financial situation and determine how much they can comfortably afford each month.
• Shopping Around: Don't settle for the first rate you see. Shop around and compare offers from different lenders. Even a small difference in interest rate can save you thousands of dollars over the life of the loan.
• Consider an Adjustable-Rate Mortgage (ARM): While ARMs come with their own risks, they often offer lower initial interest rates than fixed-rate mortgages. If you plan to move or refinance in a few years, an ARM might be worth considering. However, make sure you understand how the rate adjusts and what the maximum rate could be.
• Wait and See: If you're not in a rush, you might consider waiting to see if rates come down. Keep an eye on economic news and developments that could influence mortgage rates.

Is This the New Normal? My Thoughts and Opinions

Predicting the future of mortgage rates is always tricky. However, here are some of my thoughts based on my experience:

• Inflation is Key: The Fed's actions will largely depend on inflation. If inflation remains stubbornly high, the Fed is likely to keep interest rates higher for longer, which will keep mortgage rates elevated.
• Economic Growth Matters: If the economy slows down significantly, the Fed may be forced to cut interest rates to stimulate growth, which could bring mortgage rates down.
• Geopolitical Factors: Global events, such as trade wars or political instability, can also impact interest rates.

Honestly, I don't see mortgage rates dropping dramatically anytime soon. The combination of inflation concerns, potential tax cuts, and global uncertainty suggests that we're likely to see rates fluctuate in the 6.5% to 7.5% range for the foreseeable future.

Here's a table summarizing the key factors affecting mortgage rates:

Factor	Impact on Mortgage Rates
Inflation	Higher inflation = Higher rates
Economic Growth	Stronger growth = Higher rates; Slower growth = Lower rates
Fed Policy	Rate hikes = Higher rates; Rate cuts = Lower rates
Treasury Yields	Higher yields = Higher rates; Lower yields = Lower rates
Credit Rating Downgrades	Can lead to higher yields and thus higher rates.

Final Thoughts

The return of 7% mortgage rates is undoubtedly a setback for the housing market. However, it's important to stay informed, shop around, and carefully assess your financial situation before making any decisions. The housing market is constantly evolving, and it's crucial to be prepared for whatever comes next. Don't let headlines scare you; make informed decisions based on your own circumstances.

Looking for the states with the lowest mortgage rates today? On May 19, 2025, the states boasting the cheapest 30-year new purchase mortgage rates are New York, California, Florida, Colorado, Tennessee, Texas, Georgia, North Carolina, and Washington. These states showcase average rates ranging from 6.81% to 6.99%. Let's dive into why rates vary so much and what it means for you.

States With Lowest Mortgage Rates Today – May 19, 2025

Why Do Mortgage Rates Vary By State?

It's a question I get asked a lot: “Why is my neighbor in another state getting a better mortgage rate?” The answer is multifaceted. It's not just about which state you live in, but a combination of factors specific to that region and your individual financial situation. Here's a breakdown:

• Lender Presence and Competition: Not all lenders operate nationwide. Some focus on specific regions. The more lenders competing in a state, the better the chance of lower rates due to market competition. I've seen this firsthand, where smaller, regional banks sometimes offer incredibly competitive rates to gain market share.
• State-Level Regulations: Mortgage regulations vary significantly from state to state. These rules can impact lender costs and, subsequently, the rates they offer. Some states have stricter consumer protection laws, which, while beneficial for borrowers, might slightly increase lender overhead and rates.
• Credit Score Averages: States with higher average credit scores tend to have lower rates overall. This is because lenders perceive less risk in those areas.
• Average Loan Size: The average loan size in a state can also play a role. In areas with higher property values and larger loan amounts, lenders might adjust rates to reflect the increased risk associated with larger mortgages.
• Risk Management Strategies: Ultimately, each lender has its own unique approach to managing risk. This influences the rates they are willing to offer, depending on their internal risk appetite.

The Cheapest vs. The Most Expensive: A State-by-State Snapshot

As of today, May 19, 2025, here's a quick look at the states with the most and least expensive mortgage rates:

States with the Lowest 30-Year Mortgage Rates (New Purchase):

State	Average Rate (%)
New York	6.81-6.99
California	6.81-6.99
Florida	6.81-6.99
Colorado	6.81-6.99
Tennessee	6.81-6.99
Texas	6.81-6.99
Georgia	6.81-6.99
North Carolina	6.81-6.99
Washington	6.81-6.99

States with the Highest 30-Year Mortgage Rates (New Purchase):

State	Average Rate (%)
Alaska	7.07-7.14
West Virginia	7.07-7.14
Rhode Island	7.07-7.14
Washington, D.C.	7.07-7.14
Mississippi	7.07-7.14
Montana	7.07-7.14
North Dakota	7.07-7.14
South Dakota	7.07-7.14
Vermont	7.07-7.14

National Mortgage Rate Averages: A Broader Perspective

It's important to remember that state-level rates are just one piece of the puzzle. Let's take a look at the national averages to get a better sense of the overall mortgage rate environment.

After a small increase in mortgage rates recently, 30-year new purchase mortgages have come down a bit for two days in a row. According to Zillow, as of today, the national average is 7.01%. In March, they dipped to 6.50%, which was the lowest we've seen in 2025 so far.

Here’s a snapshot of national averages for various loan types:

Loan Type	Rate (%)
30-Year Fixed	7.01
FHA 30-Year Fixed	7.37
15-Year Fixed	6.05
Jumbo 30-Year Fixed	6.97
5/6 ARM	7.28

Understanding What Drives Mortgage Rate Fluctuations

Mortgage rates aren’t set in stone; they’re constantly influenced by a complex web of economic factors. As someone who's been following the market for years, I can tell you that predicting rates with 100% accuracy is impossible, but understanding the key drivers is crucial.

• The Bond Market (Specifically, 10-Year Treasury Yields): This is a big one. Mortgage rates tend to track the yield on the 10-year Treasury bond. When yields rise, mortgage rates usually follow suit, and vice versa.
• The Federal Reserve's Monetary Policy: The Fed's actions, especially regarding bond buying and interest rate adjustments, have a significant impact. Remember the pandemic era when the Fed was buying bonds left and right? That kept rates artificially low.
• Competition Among Lenders: The more lenders vying for your business, the better the rates you're likely to see. That's why shopping around is so important.
• Overall Economic Conditions: Factors like inflation, unemployment, and economic growth all play a role in shaping the mortgage rate environment.
• Global Events: Unexpected global events like political instability or economic crises can also cause market volatility and impact mortgage rates.

Don't Be Fooled by Teaser Rates: Get Your Personalized Rate

You've probably seen those incredibly low mortgage rates advertised online. They're tempting, but be warned: those are often “teaser rates.” They're cherry-picked to be the most attractive, and they may involve paying points upfront or require a perfect credit score and a small loan amount.

The rate you actually get will depend on your individual circumstances, including:

• Your Credit Score: A higher credit score generally means a lower rate.
• Your Income and Debt-to-Income Ratio (DTI): Lenders want to see that you can comfortably afford your mortgage payments.
• Your Down Payment: A larger down payment reduces the lender's risk and can translate into a lower rate.
• The Type of Loan: Different loan types (e.g., fixed-rate, adjustable-rate, FHA, VA) come with different rates.

The Fed's Rate Decisions: A Balancing Act

The Federal Reserve is in a tricky situation. They're trying to manage inflation without triggering a recession. Remember how aggressively the Fed raised rates in 2022 and 2023 to combat inflation? That had a huge impact on mortgage rates.

The Fed has held rates steady for its third meeting of the year, and it's possible we might not see another rate cut for several months. This means we could see multiple rate-hold announcements throughout 2025. The Fed is likely waiting to see more definitive data on inflation before making any further moves.

What This Means For You: Take Action and Shop Around!

In a fluctuating mortgage rate environment, staying informed and proactive is key. Here are my top tips for navigating the current market:

• Shop Around: Get quotes from multiple lenders. Don't just settle for the first rate you see. I recommend getting at least three quotes to compare.
• Improve Your Credit Score: Even a small improvement in your credit score can make a big difference in your interest rate.
• Save For a Larger Down Payment: The more you put down, the lower your interest rate is likely to be.
• Consider Different Loan Types: Explore different loan options to see which one best suits your needs and financial situation.
• Work With a Mortgage Professional: A qualified mortgage broker or loan officer can help you navigate the complexities of the mortgage market and find the best rate for your circumstances.

The Bottom Line

While states like New York, California, and Florida currently offer some of the lowest mortgage rates in the country, remember that your individual rate will depend on your unique financial profile. Don't get discouraged by national averages or teaser rates. Take the time to shop around, improve your credit score, and work with a professional to secure the best possible mortgage for your dream home.

As of May 18, 2025, the mortgage rates in the United States have experienced a slight decrease. This is promising news not just for homebuyers considering their first home purchase, but also for homeowners looking to refinance their existing mortgages. According to Zillow, the average 30-year fixed mortgage rate is now at 6.77%, while the 15-year fixed interest rate sits at 6.03%. These declining rates can lead to significant savings for borrowers on both monthly payments and overall loan costs.

Today's Mortgage Rates – May 19, 2025: Rates Drop Offering Savings to Buyers

Key Takeaways:

• Current Mortgage Rates:
  • Average 30-year fixed: 6.77%
  • Average 15-year fixed: 6.03%
• Refinance Rates:
  • 30-year fixed refinance: 6.97%
  • 15-year fixed refinance: 6.25%
• Market Conditions: Rates have been volatile, influenced by tariffs and other economic indicators.
• Long-term Outlook: Future rates may fluctuate based on labor market conditions and inflation trends.

Understanding Mortgage Rates

Mortgage rates represent the interest charged on a home loan. These rates vary based on several factors, including the type of loan, the loan term, the size of the down payment, and the borrower’s creditworthiness. For instance, individuals with higher credit scores often receive lower interest rates, translating into lower monthly payments and reduced total costs over the loan's term.

It's important to recognize that today's mortgage rates, especially with the current decrease, offer favorable terms for many borrowers. For first-time homebuyers, this drop could represent a significant opportunity to enter the housing market, especially given the stuck housing affordability seen in some regions.

Current Mortgage Rates

Here is a detailed look at today's mortgage rates:

Mortgage Type	Interest Rate (%)
30-year fixed	6.77
20-year fixed	6.25
15-year fixed	6.03
5/1 adjustable (ARM)	7.08
7/1 adjustable (ARM)	7.40
30-year VA	6.31
15-year VA	5.64
5/1 VA	6.29

Refinance Rates Today

For homeowners considering the option to refinance, here are the average refinance rates:

Refinance Type	Interest Rate (%)
30-year fixed	6.97
20-year fixed	6.64
15-year fixed	6.25
5/1 adjustable (ARM)	7.56
7/1 adjustable (ARM)	7.51
30-year VA	6.47
15-year VA	6.17
5/1 VA	6.37

How These Rates Affect Borrowers

The impact of mortgage rates on a borrower's financial landscape cannot be overstated. The interest rate determines how much you will end up paying over the life of the loan, and understanding this can lead to informed financial decisions when choosing a mortgage type.

For example, let’s consider a standard scenario with a 30-year fixed mortgage:

• Loan Amount: $300,000
• Interest Rate: 6.77%
• Monthly Payment: Approximately $1,950
• Total Interest Paid Over 30 Years: Approximately $401,922

As you can see, while the monthly payment may be manageable, the total interest accumulated is significant. In contrast, opting for a 15-year mortgage with its lower interest rate allows you to pay off your debt faster and incur less interest:

• Loan Amount: $300,000
• Interest Rate: 6.03%
• Monthly Payment: Approximately $2,536
• Total Interest Paid Over 15 Years: Approximately $156,558

This analysis highlights an essential trade-off—while a 15-year term has higher monthly payments, it also leads to reduced overall interest. This type of calculation is vital for borrowers to consider based on their financial capabilities and future plans.

The Market Influencers

Several factors influence mortgage rates, particularly economic indicators and Federal Reserve policies. As interest rates remained high in the recent past, fluctuations indicate that lenders are assessing market stability, inflation pressures, and unemployment rates before solidifying projections.

The current environment, as noted by several analysts, indicates that Federal Reserve officials are unlikely to cut rates anytime soon. This stabilization suggests that mortgage rates may remain elevated for a longer duration than initially expected.

Tariffs and Economic Influences

Recent changes in trade policies, specifically tariffs, are also playing a significant role in shaping the economic landscape. These tariffs have the potential to raise inflation and slow economic growth, creating uncertainty around how they will influence mortgage rates moving forward. As noted in a discussion by Fed Governor Adriana Kugler, “If tariffs remain significantly larger relative to earlier in the year, the same is likely to be true for the economic effects, which will include higher inflation and slower growth.” Such complexities show how connected global economic conditions are to individual financial decisions.

Forecast for Mortgage Rates

Looking ahead to the latter part of 2025, various economic forecasts suggest modest declines in mortgage rates if certain conditions stabilizes. Institutions such as Fannie Mae and the Mortgage Bankers Association have provided updated forecasts, with expectations indicating possible easing in rates:

Forecast (30-Year Fixed)	Q2/25 (%)	Q3/25 (%)	Q4/25 (%)	Q1/26 (%)
Fannie Mae	6.5	6.3	6.2	6.1
MBA	7.0	6.8	6.7	6.6

These projections exhibit a cautious optimism that, should the economy show signs of steadying, borrowers might benefit from reduced mortgage rates. This perspective offers a glimmer of hope for prospective homebuyers or those contemplating refinancing.

The Importance of Shopping Around

In this fluctuating market, it’s particularly important for borrowers to shop around when securing a mortgage. Different lenders may offer a variety of rates and conditions based on their assessment criteria. Comparing offers can ensure that borrowers receive not only competitive rates but also favorable terms that align with their financial strategies. Moreover, engaging with multiple lenders may yield benefits, especially with respect to unlocking lower rates or better deal structures.

Adjusting Expectations Based on Market Conditions

Borrowers must also keep in mind market conditions when evaluating their options. For instance, some borrowers may be tempted to wait for rates to drop further before making a home purchase. However, market analysts suggest that this may not be advisable, especially if a borrower is financially prepared. By waiting, prospective buyers run the risk of missing out on suitable properties. With rates expected to fluctuate frequently, being well-informed and ready to act can often be the best strategy.

Bottom Line

In summary, the slight decrease in mortgage rates as of May 18, 2025, offers favorable conditions for homebuyers and those looking to refinance their current mortgages. With various economic factors at play, borrowers should remain engaged with market trends and educated about their options to make the best financial decisions. Understanding how mortgage rates impact borrowing costs is crucial for forming a solid financial plan, whether looking to buy a new home or refinance an existing loan.

Staying proactive and informed in this dynamic environment is essential to maximizing the benefits that today's lower mortgage rates can provide. Keeping a close eye on emerging economic indicators and being ready to act can serve individuals well as they navigate the process of securing a mortgage or refinancing an existing home loan.

As of May 18, 2025, mortgage rates have decreased, presenting a more favorable environment for home buyers and those considering refinancing their existing loans. The average 30-year fixed interest rate is now at 6.77%, down eight basis points, while the 15-year fixed rate has fallen to 6.03%, a decline of ten basis points. This trend is encouraging and may motivate potential buyers to engage more actively in the housing market.

Today's Mortgage Rates – May 18, 2025: Rates Go Down Again by 8 Basis Points

Key Takeaways:

• Mortgage Rates: Average 30-year fixed rates at 6.77% and 15-year fixed rates at 6.03%.
• Refinance Rates: 30-year refinance rates at 6.97%; 15-year refinance rates at 6.25%.
• Economic Trends: The current decreases in rates suggest stabilization in the economy, potentially leading to more decisions in home purchases and refinancing.

Current Mortgage Rates

As home buying seasons often heat up around this time of year, here’s a summary of the current mortgage rates observed today:

Type of Mortgage	Rate (%)
30-Year Fixed	6.77%
20-Year Fixed	6.25%
15-Year Fixed	6.03%
5/1 Adjustable Rate Mortgage	7.08%
7/1 Adjustable Rate Mortgage	7.40%
30-Year VA	6.31%
15-Year VA	5.64%
5/1 VA	6.29%

Source: Zillow

These rates represent the national averages and may vary based on the lender and specific borrower circumstances.

Current Mortgage Refinance Rates

For those looking to refinance, here are the average rates for refinancing observed today:

Type of Refinance Mortgage	Rate (%)
30-Year Fixed	6.97%
20-Year Fixed	6.64%
15-Year Fixed	6.25%
5/1 Adjustable Rate Mortgage	7.56%
7/1 Adjustable Rate Mortgage	7.51%
30-Year VA	6.47%
15-Year VA	6.17%
5/1 VA	6.37%

Source: Zillow

Mortgage refinance rates often exceed purchase mortgage rates due to different loan payback structures and borrower advantages, but the current trends show competitive offerings that could benefit those looking to refinance.

Understanding Mortgage Types: Fixed vs. Adjustable

Mortgage options can be broadly classified into fixed-rate and adjustable-rate mortgages (ARMs).

• Fixed-Rate Mortgages: The interest rate remains constant throughout the life of the loan, making it easier for borrowers to plan their budgets, as monthly payments remain predictable. The most popular fixed-rate mortgage is the 30-year term because it spreads the loan amount over a longer period, resulting in lower monthly payments. For instance, with a $300,000 mortgage at the current 6.77% rate for 30 years, your monthly payment would be approximately $1,950, which translates to $401,922 paid in interest over the life of the loan.
• Adjustable-Rate Mortgages: Conversely, ARMs start with a lower initial rate that adjusts after a specified period. For example, a 7/1 ARM has a fixed rate for the first 7 years and then adjusts annually based on market conditions. While ARMs can offer lower initial rates, there is a risk that payments may increase significantly if rates rise after the initial period. To illustrate, if the initial rate is 4% for the first 7 years and then increases by 2%, future payments could dramatically impact a homeowner’s budget.

Strategies for Securing Lower Rates

If you're in the market for a mortgage, there are strategies to secure the best possible rate.

• Compare Lenders: Don’t settle for the first offer you receive. It’s wise to apply for preapproval with multiple lenders—ideally three to four. This not only gives you various options but also helps you understand what rates you may qualify for given your unique financial circumstances, including credit scores and debt-to-income ratios.
• Understand APR vs. Interest Rate: When comparing loans, be sure to look closely at the Annual Percentage Rate (APR), which factors in the interest rate plus any additional fees that might come with the loan. The APR provides a clearer picture of what you will actually pay over the loan’s lifespan, as it reflects the true annual cost of borrowing.
• Consider Discount Points: Buying discount points may enable you to lower your long-term interest rate by paying a little extra upfront. Each point typically costs 1% of the mortgage amount and generally reduces the rate by 0.25%. If you plan on staying in your home long enough to recoup these costs through your lower monthly payments, this option might be worth considering.

Economic Influences on Mortgage Rates

Understanding that while mortgage rates are currently trending downward, various economic indicators can influence future adjustments is crucial. Keeping an eye on these factors informs both buyers and investors about potential fluctuations in rates.

• Inflation and Employment: Inflation is a key determinant of interest rates. As inflation rises, buyers often face higher rates, because lenders also raise their rates to offset the potential decline in the purchasing power of money. Conversely, if the labor market begins to show signs of weakness, mortgage rates might decrease in anticipation of slower economic growth. Historically, rates tend to decline during recessions when investors flock toward safer assets and the Federal Reserve lowers the federal funds rate in an effort to stimulate borrowing.

Future Projections

Looking forward, predictions from the Mortgage Bankers Association (MBA) and Fannie Mae highlight how rates might change in the coming months. Here are their expected averages for the next few quarters:

Forecaster	Q2/25	Q3/25	Q4/25	Q1/26
Fannie Mae	6.5%	6.3%	6.2%	6.1%
MBA	7.0%	6.8%	6.7%	6.6%

These projections suggest a gradual decline in rates over the next few quarters, presenting opportunities for buyers and refinancers alike. However, it’s important to approach these forecasts with caution, as economic unpredictability can result in abrupt changes in the mortgage market.

Calculating Monthly Payments

Understandably, the distinction between various mortgage options leads to different financial obligations on a monthly basis. Using a standard mortgage calculator can help you visualize potential payments under different scenarios. For example, let’s calculate potential monthly payments for a $300,000 loan under varying rates:

1. 30-Year Fixed at 6.77%:
   • Monthly payment: $1,950
   • Total interest after 30 years: $401,922
2. 15-Year Fixed at 6.03%:
   • Monthly payment: $2,536
   • Total interest after 15 years: $156,558
3. 7/1 ARM starting at 4.00%:
   • Monthly payment for first 7 years: $1,432
   • Total interest (if rates rise to 6% after the initial period): Future payments would vary based on market adjustments.

These calculations provide an essential perspective on how different mortgage types can affect total out-of-pocket expenses over time.

Understanding the Home Buying Process

Navigating the home-buying process can sometimes be overwhelming, especially when it comes to understanding mortgage rates and lender options. Begin by assessing your financial health, including credit score and existing debts, which will ultimately influence the rates you’re offered.

Deciding on a budget crucially determines the price range you can consider while house hunting. Don't forget to include potential homeowner insurance, property taxes, and maintenance costs in your total budget. These factors provide a more realistic view of your overall financial responsibilities, helping to avoid potential pitfalls in the future.

The Bottom Line

As we observe today, mortgage rates are lower—an encouraging sign for both prospective homebuyers and those contemplating refinancing. The continuous assessment of economic conditions will play a vital role in how these rates might change moving forward. Understanding your options and being proactive in comparing lenders will immensely benefit you in getting favorable mortgage terms.

As of May 17, 2025, mortgage rates have shown a notable decrease, making it a potentially advantageous time to explore your options. The current average rate for a 30-year fixed mortgage stands at 6.77%, down from previous highs. For 15-year fixed mortgages, rates have dropped to 6.03%. This trend of decreasing rates could encourage homebuyers to take the plunge, especially in light of persistent economic uncertainties.

Today's Mortgage Rates – May 17, 2025: Rates Go Down Notably Across the Board

Key Takeaways

• Mortgage rates have decreased today, creating a favorable environment for buyers and refinancers.
• The 30-year fixed mortgage rate is now 6.77% and the 15-year fixed is at 6.03%.
• It's advisable to lock in your rate in this volatile market to protect against future increases.
• Economic factors such as tariffs and inflation remain influential and could affect future rates.

Understanding Today's Mortgage Rates

Today's mortgage rates represent an important aspect for prospective homebuyers as well as those looking to refinance their existing loans. These rates are influenced by a variety of factors, including economic indicators, inflation, Federal Reserve policies, and even geopolitical events, such as tariffs. It’s crucial to understand how these elements may affect your finances, whether you are purchasing a home for the first time or refinancing an existing mortgage.

Current Mortgage Rates Overview

According to the latest data from Zillow, here are today's average mortgage rates:

Loan Type	Current Rate
30-Year Fixed	6.77%
20-Year Fixed	6.25%
15-Year Fixed	6.03%
5/1 ARM	7.08%
7/1 ARM	7.40%
30-Year VA	6.31%
15-Year VA	5.64%
5/1 VA	6.29%

Remember, these are average rates and can vary based on location, credit score, and the lender's pricing strategies. For example, individuals in urban areas with high living costs may encounter higher rates compared to those in more rural settings.

Today's Refinance Rates: What You Need to Know

Refinancing can be a great way to lower your monthly mortgage payment and save money over time. As of May 17, here are the average refinance rates:

Refinance Loan Type	Current Rate
30-Year Fixed	6.97%
20-Year Fixed	6.64%
15-Year Fixed	6.25%
5/1 ARM	7.56%
7/1 ARM	7.51%
30-Year VA	6.47%
15-Year VA	6.17%
5/1 VA	6.37%

While refinance rates are typically higher than rates for new purchases, they can still offer substantial savings, especially if homeowners can bring their rates below their existing loan terms.

Trends Affecting Mortgage Rates as of May 2025

Currently, there are several trends and factors influencing today's mortgage rates.

• Economic Predictions and Tariffs: The economic outlook is mixed. Discussions around tariffs and their impact on inflation lead to uncertainty in the market. Typically, if tariffs raise inflation, mortgage rates may rise as lenders try to mitigate risks. The potential discomfort in the labor market could mean lower rates as a strategy to spur growth.
• Labor Market Dynamics: The labor market has been resilient; however, as slowdowns are expected, a deepening recession could mean lower mortgage rates as demand decreases. Economists monitor various metrics such as employment rates, wage growth, and consumer confidence which all provide clues into how the market might move. An increase in unemployment, for instance, could prompt lenders to offer lower rates to stimulate borrowing and spending.
• Federal Reserve Policies: The actions of the Federal Reserve, including interest rate hikes to combat inflation, directly affect mortgage rates. Higher benchmark rates usually result in increased mortgage rates, while rate cuts tend to lower them. Recently, the Fed's approach has been cautious; they are weighing the risk of inflation against the need to support economic growth. This balancing act can create fluctuations in mortgage rates.

Understanding the Types of Mortgages

The choice between different types of mortgages can significantly affect your financial situation. Below are some insights into various mortgage types:

30-Year Fixed Mortgage

The most common type of mortgage, the 30-year fixed, offers lower monthly payments and predictability.

• Advantages:
  • Lower Monthly Payments: Due to the long duration of the loan.
  • Predictable Payments: Your interest rate will not change over the life of the loan, making budgeting easier.
• Disadvantages:
  • Higher Interest Costs: Over the life of the loan, you will pay more interest.
  • Longer Debt: You’re in debt longer than with shorter term loans, potentially delaying other financial goals.

The 30-year fixed mortgage can be ideal for first-time homebuyers, as the lower payments help ease the transition to homeownership. However, over time, many borrowers may consider refinancing or switching to a different mortgage type as their financial situations evolve.

15-Year Fixed Mortgage

The 15-year fixed mortgage is appealing for those wanting to pay off debt faster.

• Advantages:
  • Lower Interest Rates: Typically lower than 30-year fixed loans.
  • Less Interest Paid Over Time: You will reduce the total interest paid over the life of the loan.
• Disadvantages:
  • Higher Monthly Payments: Since you are paying the loan in half the time, your payments are significantly higher.
  • Budget Constraints: Higher payments might strain your monthly budget, especially during unpredictable times.

The shorter term means that you can build equity more quickly, which can be advantageous in a rising real estate market. For those who want to retire debt sooner or can handle a higher payment, this option could be a good fit.

Adjustable Rate Mortgages (ARMs)

ARMs, such as the 5/1 ARM, can save money in the short term.

• Advantages:
  • Lower Initial Rates: Typically, ARMs have lower initial rates than fixed-rate mortgages.
  • Potential Savings: Lower payments if rates remain stable or decrease.
• Disadvantages:
  • Rate Uncertainty: After the fixed period, the rates can fluctuate, making budgeting challenging.
  • Potentially Higher Payments: If rates increase, your payments could significantly increase, leading to financial strain.

While ARMs can initially provide more affordable options for new homeowners, they can also present risks for those who may not stay in their homes long enough to enjoy the benefits. It’s essential to carefully assess how likely it is that you will stay in that home long term, and if market fluctuations will significantly raise your costs.

Is Now a Good Time to Invest in Real Estate?

Given the current market conditions, many would ask if now is the right time to invest in real estate. It's essential to consider:

• Home Prices and Market Stability: Compared to the height of the pandemic, home prices aren’t surging. This stabilization can signal a good time for buyers. The economic climate has changed significantly, and properties may be more accessible than they were during earlier periods of heightened demand.
• Rate Predictions: While rates have dropped recently, forecasts suggest that they might remain relatively stable or even increase later in the year, making now a suitable time to lock in a rate.

Importantly, timing the market is a risky endeavor. Many experts agree that personal reasons for buying a home, such as life changes or an increase in family size, should provide the primary motivation. A holistic view of your personal circumstances, financial situation, and long-term goals will always be more prudent than waiting for an ideal moment in the market.

Mortgage Rates: What to Expect Moving Forward

Looking ahead, industry forecasts from Fannie Mae and the Mortgage Bankers Association suggest:

Forecaster	Q2/25	Q3/25	Q4/25	Q1/26
Fannie Mae	6.5%	6.3%	6.2%	6.1%
MBA	7.0%	6.8%	6.7%	6.6%

The consensus indicates a gradual decline over the next few quarters, driven by economic factors that may include inflation pressures and labor market concerns. However, these projections can fluctuate due to unforeseen economic developments. Understanding how to read these forecasts can empower prospective buyers and homeowners alike, making it easier to make sound decisions based on reliable information.

The Bottom Line Regarding Mortgage Rates

While fluctuating market conditions and economic indicators pose uncertainties, the current drop in mortgage rates may present favorable conditions for home buyers and those looking to refinance. Understanding the nuances of various mortgage options can aid you in making informed financial decisions moving forward. As you navigate this landscape, keep in mind that knowledge is not just power; it’s peace of mind in an otherwise tumultuous economic environment.

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!

As of May 16, 2025, mortgage rates have slightly increased this week but remain lower compared to the same time last year. The 30-year fixed mortgage rate now sits at 6.85%, while the 15-year fixed rate is at 6.13%. Despite this recent uptick in rates, buyers may find comfort knowing that these figures are significantly lower than last year's averages, making it a more favorable time for potential homebuyers.

Today's Mortgage Rates – May 16, 2025: Rates Are Up as Compared to Last Week

Key Takeaways

• Mortgage Rates: 30-year fixed at 6.85%; 15-year fixed at 6.13%.
• Refinance Rates: 30-year refinance at 6.99%; 15-year refinance at 6.35%.
• Year-over-Year Comparison: Rates decreased from last year, providing better opportunities for homebuyers.
• Market Influence: Recent rates impacted by inflation expectations due to tariffs.
• Future Outlook: Economists predict rates may stabilize or decrease slightly in the coming months.

Current Mortgage Rates

Today’s mortgage rates show an increase across various term lengths, primarily influenced by market conditions. Let's take a closer look at the current mortgage and refinance rates from Zillow.

Loan Type	Current Rate (%)
30-Year Fixed	6.85%
20-Year Fixed	6.34%
15-Year Fixed	6.13%
5/1 Adjustable	7.18%
7/1 Adjustable	7.38%
30-Year VA	6.33%
15-Year VA	5.76%
5/1 VA	6.49%

These rates reflect national averages and may vary based on the lender and individual borrower qualifications, including credit score, down payment, and overall financial profile.

Current Mortgage Refinance Rates

Refinancing remains an option for many homeowners looking to lower their mortgage payments or cash out some equity. Here's how today's refinance rates compare:

Refinance Loan Type	Current Rate (%)
30-Year Fixed	6.99%
20-Year Fixed	6.56%
15-Year Fixed	6.35%
5/1 Adjustable	7.26%
7/1 Adjustable	7.22%
30-Year VA	6.46%
15-Year VA	5.94%
5/1 VA	6.39%

This data allows borrowers to assess refinancing options based on current market rates. It is essential for homeowners considering refinancing to evaluate rates closely, as they may significantly impact monthly payments.

Understanding Mortgage Interest Rates

Mortgage interest rates are essentially the cost of borrowing money to purchase a home. Expressed as a percentage, they can significantly influence your monthly payments and the total payoff amount over the life of a loan.

Fixed vs. Adjustable Rates

• Fixed-Rate Mortgages: These loans maintain the same interest rate throughout the term, providing predictability. Common terms include 30-year and 15-year options. For a 30-year fixed mortgage, the borrower’s monthly payments will remain unchanged, allowing homeowners to budget effectively.
• Adjustable-Rate Mortgages (ARMs): These rate options usually start with a lower initial rate that adjusts after a specified period, such as 5 or 7 years. For example, in a 5/1 ARM, the rate remains fixed for the first five years and then adjusts annually based on market conditions. Borrowers need to carefully weigh the pros and cons of variable interest rates, as fluctuations could affect long-term financial stability.

Market Trends and Influences

Over the past few months, interest rates have been responsive to several factors, notably inflationary pressures brought about by tariff policies. Recent increases, particularly the five basis point jump in 30-year fixed rates, reflect a market reaction to economic signals.

The Role of Tariffs and Inflation

Expectations that tariffs will drive inflation higher have contributed to the slight rise in mortgage rates. Economic forecasts indicate that the Federal Reserve may need to keep interest rates elevated to counteract inflation, which could limit the extent to which mortgage rates drop in the short term.

In a recent speech, Fed Chair Jerome Powell expressed concern that inflation might soon become more volatile, which could keep rates elevated longer than anticipated. Tariffs on goods now affect construction materials, increasing the overall costs for builders and, consequently, the prices of new homes. Homebuyers may face competitive pricing in the market, making home purchases potentially costlier than in the previous year.

Current Trends Compared to Last Year

Looking back to May 2024, it’s encouraging that mortgage rates have decreased significantly:

• The 30-year fixed rate one year ago was 7.13%, indicating a decrease of 28 basis points.
• The 15-year fixed rate fell from 6.59%, showing a decrease of 46 basis points.

This drop in rates enhances affordability for a broader array of homebuyers, making it a more favorable time to enter the housing market. The overall economy also plays a role, as potential buyers may take advantage of lower rates before any significant adjustments occur.

Expert Forecasts for Mortgage Rates

Economists closely monitor and predict mortgage rate trends. Both Fannie Mae and the Mortgage Bankers Association (MBA) have provided their forecasts for the upcoming months. Here’s a summary based on their projections for 30-year fixed-rate mortgages:

Forecaster	Q2/25 (%)	Q3/25 (%)	Q4/25 (%)	Q1/26 (%)
Fannie Mae	6.5%	6.3%	6.2%	6.1%
MBA	7.0%	6.8%	6.7%	6.6%

The projections suggest a gradual decrease in rates over the rest of 2025, though these forecasts are subject to national and global economic conditions. While the forecasts indicate potential relief for buyers, fluctuations in the market mean that both economic growth and inflation trends will continue to influence the housing landscape.

How Average Rates Affect Monthly Payments

Understanding how these rates translate to actual monthly payments is crucial for any homebuyer or homeowner considering refinancing. Here’s a quick example using the 30-year fixed rate of 6.85% for a mortgage of $300,000:

• Monthly Principal and Interest: At a 6.85% interest rate, the monthly payment (excluding taxes and insurance) would be approximately $1,965.
• Over the course of the full 30 years, this loan would yield total interest payments nearing $682,000.

In comparison, had you locked in the lower rate of 6.50%, the monthly payment would be about $1,898, resulting in roughly $612,000 in interest over the life of the loan. This exemplifies how even slight rate differences can lead to substantial savings.

The Bigger Picture: Economic and Social Implications

The implications of mortgage rates extend beyond individual buyers, affecting the broader economy, including employment in construction and real estate sectors. With mortgage rates being a significant contributor to housing demand, fluctuations will have ripple effects throughout the economic fabric.

Higher rates can slow down the housing market, resulting in less new home construction, impacting jobs in related fields. Conversely, lower rates typically stimulate housing demand, driving homebuilders to meet new demand and potentially fostering job creation within the sector.

As potential homebuyers navigate these fluctuations, many are also weighing their options regarding rental versus buying. Increased mortgage rates might deter some from purchasing, pushing them into rental markets, subsequently increasing rental prices due to heightened demand.

Summary:

While it’s true that mortgage rates increased slightly this week, they are still competitively lower compared to last year's figures. The housing market remains active, driven by buyers' desire to capitalize on favorable pricing from the last year. However, potential buyers should remain aware of market fluctuations and strategize accordingly, especially with influences from macroeconomic changes. The coming months will be key for the housing market, as the balance of inflation concerns, economic growth narratives, and Federal Reserve actions continues to play out.

Understanding today’s mortgage landscape is more critical than ever for buyers and homeowners alike. As economic conditions evolve, the need for informed decision-making remains paramount in the home buying process.

Looking to buy a home and wondering where to find the best mortgage rates? As of today, May 15, 2025, the states with the lowest mortgage rates for a 30-year new purchase are New York, California, Florida, Pennsylvania, Tennessee, and Texas, along with a tie that includes Georgia and North Carolina. These states are currently showing average rates between 6.89% and 7.05%.

States With Lowest Mortgage Rates Today – May, 15 2025

It's important to remember that mortgage rates are always in flux, so keep an eye on them and keep yourself up to date.

Why Do Mortgage Rates Vary By State?

You might be asking yourself, “Why are mortgage rates different in different states?” It's a fair question. Several factors contribute to this variation, and understanding them can help you make a more informed decision when choosing a lender.

• Lender Presence: Not all lenders operate in every state. Some are regional players, while others have a nationwide presence. The competition between lenders can influence rates. More competition often means lower rates, as lenders try to attract borrowers.
• State-Specific Regulations: Each state has its own set of regulations regarding mortgages. These regulations can affect the cost of doing business for lenders, which, in turn, can impact the rates they offer.
• Credit Score Averages: States with higher average credit scores may see slightly lower rates overall. This is because lenders view borrowers in those states as less risky.
• Average Loan Size: The average loan size can also influence rates. In areas with higher home prices and larger loans, lenders might adjust their rates accordingly.
• Risk Management Strategies: Different lenders have different ways of managing risk. Some might be more aggressive in their pricing, while others might take a more conservative approach.

Today's Rate Landscape: A Closer Look

While the states mentioned above offer the most competitive rates right now, other states are experiencing higher averages. On May 15, 2025, the states with the highest mortgage rates include Alaska, West Virginia, Maryland, and Washington, D.C., followed by a tie that includes Iowa and Maine. The average rates in these states range from 7.12% to 7.22%.

Here's a quick summary:

• Lowest Rates (6.89% – 7.05%): New York, California, Florida, Pennsylvania, Tennessee, Texas, Georgia, North Carolina
• Highest Rates (7.12% – 7.22%): Alaska, West Virginia, Maryland, Washington, D.C., Iowa, Maine

National Averages and Trends

Looking at the national picture, we can see that rates have been on a bit of a roller coaster recently. According to Zillow, the national average for a 30-year new purchase mortgage is 7.07% as of May 15, 2025. This is up from a low of 6.50% in March 2025, but still lower than the 7.14% we saw in mid-April. Interestingly, September 2024 saw rates plunge to a two-year low of 5.89%.

Loan Type	New Purchase
30-Year Fixed	7.07%
FHA 30-Year Fixed	7.37%
15-Year Fixed	6.14%
Jumbo 30-Year Fixed	7.04%
5/6 ARM	7.24%

Source: Zillow

As you can see, the type of loan you choose can also impact your rate. 15-year fixed-rate mortgages generally have lower rates than 30-year fixed-rate mortgages, but they also come with higher monthly payments. Adjustable-rate mortgages (ARMs) like the 5/6 ARM can start with lower rates, but those rates can change over time.

Don't Fall for Teaser Rates!

It's tempting to jump at the lowest rates you see advertised online, but be cautious! These “teaser rates” often come with strings attached. They might require you to pay points upfront (which is like paying interest in advance), or they might be based on a borrower with a perfect credit score and a very small loan.

The rate you actually get will depend on your individual circumstances, including:

• Credit Score: A higher credit score generally means a lower rate.
• Income: Lenders want to see that you have a stable income and can afford your monthly payments.
• Debt-to-Income Ratio (DTI): Your DTI is the percentage of your monthly income that goes towards debt payments. A lower DTI is better.
• Down Payment: A larger down payment can lower your rate and reduce the amount of interest you pay over the life of the loan.
• Loan Type: As we saw earlier, different loan types have different rates.

Shopping Around is Key!

No matter where you live or what type of loan you're seeking, shopping around is essential. Don't settle for the first rate you're offered. Get quotes from multiple lenders and compare them carefully. It can save you thousands of dollars over the life of your loan.

Understanding the “Why”: Factors Influencing Mortgage Rate Fluctuations

As someone who's been following the mortgage market for a while, I can tell you that predicting rate movements is never an exact science. However, understanding the key factors that influence rates can give you a better sense of what to expect. These factors include:

• The Bond Market: Mortgage rates are closely tied to the bond market, particularly the 10-year Treasury yield. When Treasury yields rise, mortgage rates tend to follow suit.
• The Federal Reserve (The Fed): The Fed's monetary policy has a significant impact on the mortgage market. The Fed influences rates indirectly by changing the federal funds rate and through bond-buying programs. The Fed kept the federal funds rate at its peak level for almost 14 months, beginning in July 2023, before announcing a first rate cut of 0.50 percentage points, and then followed that with quarter-point reductions in November and December..
• Inflation: High inflation can lead to higher interest rates, as lenders demand a higher return to compensate for the eroding value of money.
• Economic Growth: A strong economy can also push rates higher, as demand for credit increases.

Looking Ahead: What to Expect in 2025

It's hard to say for sure what the rest of 2025 will bring in terms of mortgage rates. The Fed's decisions on interest rates will be a major factor. If inflation remains under control, we could see further rate cuts, which would be good news for homebuyers. However, if the economy remains strong, the Fed might hold rates steady, or even raise them.

Estimate Your Monthly Payment

To get a sense of what your monthly mortgage payment could look like, use a mortgage calculator. You'll need to input your home price, down payment, loan term, and interest rate. You can also estimate your property taxes and homeowners insurance to get a more accurate picture.

For example, let's say you're buying a home for $440,000 with a 20% down payment and a 30-year loan at an interest rate of 6.67%. Your estimated monthly payment would be approximately $2,649.04.

Final Thoughts

Finding the lowest mortgage rate requires research, comparison, and a solid understanding of the factors that influence rates. By staying informed and shopping around, you can put yourself in the best possible position to secure a favorable mortgage and achieve your homeownership goals.