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Mortgage Rates Predictions for the Next 2 Years: 2026 and 2027

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Mortgage rates are a fundamental determinant of housing market activity, directly impacting affordability for prospective homebuyers and influencing refinancing decisions for current homeowners. After a period of significant volatility, rates in 2025 have settled into a range that, while still elevated compared to the historically low levels of the pandemic era, shows signs of potential future easing.

This article provides a detailed look at current mortgage rate trends, followed by an in-depth analysis of the factors expected to shape mortgage predictions for 2026 and 2027, drawing upon expert forecasts and prevailing economic indicators.

Mortgage Rates Predictions for Next 2 Years: 2026 and 2027

Current Mortgage Rates Trends in 2025 (Till Date)

The year 2025 has seen mortgage rates fluctuate, reflecting ongoing economic adjustments and policy responses. As of July 2, 2025, the average 30-year fixed mortgage rate stands at approximately 6.74%, according to data from Zillow. While notably lower than the multi-decade highs exceeding 8% seen in late 2023, these rates are a significant departure from the sub-4% environment prevalent just a few years prior.

Here's a snapshot of average national rates for key mortgage types as of early July 2025:

Mortgage Type National Average APR (July 2, 2025) Weekly Change
30-Year Fixed 6.75% -0.04%
15-Year Fixed 5.76% -0.05%
5-Year ARM 7.50% +0.04%

Source: Zillow

Several key factors have driven these trends in 2025:

  1. Federal Reserve Monetary Policy: The actions of the U.S. Federal Reserve remain arguably the most significant influence. Following three interest rate cuts in 2024, which brought the federal funds rate down to a range of 4.25%-4.50% from 5.25%-5.5%, the Fed has paused its easing cycle through the early part of 2025. This pause, as noted by Forbes Advisor, is a result of the Fed's cautious stance, balancing progress on inflation (which has cooled to around 2.7% but remains above the 2% target) with a surprisingly robust labor market, evidenced by recent strong jobs reports.
  2. 10-Year Treasury Yield: Mortgage rates track closely with the yield on the 10-year U.S. Treasury note, which reflects market expectations about future interest rates and economic growth. As of late April 2025, the 10-year Treasury yield was around 4.37%. The spread between this benchmark yield and the average 30-year mortgage rate typically hovers around 1.5% to 2.0%; however, in 2025, this spread has been wider, sitting around 2.51% as of June, reflecting various market risk factors and the specific dynamics of the mortgage market.
  3. Economic Sentiment and Volatility: The year has been marked by continued, albeit less extreme, volatility. Rates dipped into the mid-6% range in March before rising again in May, closing that month around 6.89%. This fluctuation is partly fueled by broader economic uncertainties, including potential global trade disruptions and tariff policies, which increase overall market volatility and can indirectly pressure rates.

In summary, 2025 has seen mortgage rates hovering in the upper 6% to lower 7% range, anchored by a Federal Reserve waiting patiently for more definitive signs on inflation and the labor market before resuming rate cuts, and influenced by a 10-year Treasury yield that reflects a mix of stable growth expectations tempered by ongoing uncertainties.

Mortgage Rates Predictions for 2026

Looking ahead to 2026, the consensus among leading housing market analysts points towards a modest, gradual decline in mortgage rates. This outlook is primarily predicated on the anticipated trajectory of Federal Reserve policy and evolving economic conditions.

  • Expert Forecasts: Major institutions forecast rates to move slightly lower through 2026. Fannie Mae projects the 30-year fixed mortgage rate to end 2026 at 6.1%, a decrease from their 6.5% projection for the end of 2025. Similarly, the Mortgage Bankers Association (MBA) predicts rates stabilizing at 6.3% by the close of 2026, adjusting slightly upwards from previous, more optimistic forecasts but still indicating a downward trend from current levels. Other sources like U.S. News also project rates to settle in the mid-6% range.
Source 2025 Year-End Prediction 2026 Year-End Prediction
Fannie Mae 6.5% 6.1%
MBA 6.7% 6.3%
U.S. News 6.3% Mid-6% range
  • Federal Reserve Policy: The primary driver of the expected decline is the anticipated easing of monetary policy by the Federal Reserve. The Fed's Summary of Economic Projections (SEP) from March 2025 indicates a projected median federal funds rate of 3.4% by the end of 2026, down from a projected 3.9% for the end of 2025. This expected series of rate cuts is designed to gently cool the economy and bring inflation fully back to target. Lower short-term rates reduce pressure on longer-term bond yields, including the 10-year Treasury, which in turn influences mortgage rates downward.
  • Economic Factors: The economic backdrop is also expected to be generally supportive of slightly lower rates in 2026:
    • Inflation: If inflation continues its path towards the Fed's 2% target, as some analyses like Deloitte Insights suggest it will, the Fed will gain confidence to implement the projected rate cuts, directly benefiting mortgage rates.
    • Economic Growth: The Fed's projections anticipate a stable but perhaps slightly slower pace of economic growth in 2026 (2.1% real GDP growth projected for 2026 vs. 2.2% in 2025). A steady, non-accelerating economy typically allows interest rates to normalize lower.
    • Housing Market: While the housing market is characterized by a persistent shortage of inventory, which can influence economic activity, the direct impact on national interest rates is secondary to the broader macroeconomic picture and Federal Reserve actions.
  • Risks and Uncertainties: While the outlook for 2026 points towards some easing, risks remain.
    • Persistent Inflation: Should inflation prove stickier than anticipated, or reaccelerate unexpectedly, the Fed could slow or pause its rate cuts, keeping the federal funds rate higher and consequently exerting upward pressure on mortgage rates.
    • Economic Resilience: A stronger-than-expected economy could also lead the Fed to maintain a tighter stance for longer.
    • Geopolitical and Trade Issues: Global events, including ongoing trade tensions, can inject uncertainty into financial markets, potentially increasing volatility in bond yields and mortgage rates.

In essence, 2026 is expected to be a year where mortgage rates gradually decline, driven by the Federal Reserve's planned rate cuts as inflation moves closer to target, provided the economy remains stable. The 6.3% area appears to be a reasonable consensus target by the end of the year.

Mortgage Rates Predictions for 2027

Predicting mortgage rates for 2027 involves a higher degree of uncertainty, as forecasts extending this far out are subject to more potential deviations from the projected path. However, based on the expected trajectory of monetary policy and a normalization of economic conditions, a further decline in rates appears plausible.

  • Longer-Term Outlook: The Federal Reserve's SEP from March 2025 projects the median federal funds rate to reach 3.1% by the end of 2027. This indicates an expectation of a continued, albeit potentially slower, pace of policy easing beyond 2026.
  • 10-Year Treasury Yield Relationship: The relationship between the federal funds rate, the 10-year Treasury yield, and mortgage rates is key to the 2027 outlook. As the federal funds rate declines towards 3.1%, the 10-year Treasury yield would typically also move lower, although not in lockstep. Historical patterns and projections suggest a normalized 10-year Treasury yield could range between 3.5% and 4.0% under such conditions. Given the current mortgage-Treasury spread (around 2.51%), this would imply 30-year fixed mortgage rates potentially ranging from 5.5% to 6.0% by the end of 2027. This estimate is based on the logic derived from the Fed's projected policy rate and the current market spread environment.
  • Potential Scenarios: While the 5.5%-6.0% range reflects a balance of probable factors, more optimistic scenarios exist. Some long-range forecast models, such as Long Forecast, predict rates as low as 4.7% by December 2027. Such a scenario would likely require more aggressive Fed rate cuts than currently projected, a significant narrowing of the mortgage-Treasury spread back towards historical averages (closer to 1.5%-2.0%), or a combination of both, perhaps driven by a faster economic slowdown or quicker-than-expected disinflation. Given the current economic signals and the Fed's cautious approach, the 5.5%-6.0% range appears more aligned with available projections.
  • Risks and Considerations: The 2027 outlook is subject to several potential pitfalls:
    • Inflation Surprises: If inflationary pressures persist unexpectedly, potentially due to supply chain issues, wage growth, or commodity prices, the Fed may be forced to keep rates higher for longer, pushing mortgage rates towards the upper end of, or even above, the projected range.
    • Global Economic Climate: Trade policies, geopolitical conflicts, and the economic health of major global partners can all ripple through U.S. markets, influencing interest rates. Continued trade disputes, like those impacting U.S.-Canada trade, could increase economic friction and uncertainty.
    • Housing Supply Dynamics: The ongoing structural shortage in housing supply, highlighted by sources like Mortgage Sandbox, could keep home prices elevated, potentially influencing overall economic activity and, indirectly, the interest rate environment, though this is less of a primary driver of national rates than monetary policy.

Implications for Homebuyers

The anticipated gradual decline in mortgage rates over the next two years offers a degree of cautious optimism for prospective homebuyers. A potential drop from current levels around 6.88% to a range of 5.5%-6.0% by late 2027 could significantly improve affordability. For context, on a $400,000 mortgage, a rate reduction of 1% could lower the monthly principal and interest payment by approximately $250.

However, potential buyers should temper this optimism with other market realities. Home prices, while perhaps not appreciating at the rapid pace seen during the pandemic, are still expected to rise modestly (Fannie Mae forecasts a 3.5% increase in 2025 and 1.7% in 2026). These price increases can offset some of the affordability gains from lower rates.

Therefore, prospective homebuyers should consider the following:

  • Stay Informed: Closely monitor economic data releases, particularly those related to inflation and employment, as well as statements and actions from the Federal Reserve.
  • Shop Around: Rates vary between lenders. Comparing offers from multiple institutions is crucial (some lenders, like Tomo, were reportedly offering rates as low as 6.08% in early June 2025, demonstrating the potential for variation).
  • Consider Rate Locks: If purchasing in the near term, be mindful of potential volatility. Locking in a rate when you find one you are comfortable with can provide certainty, even if rates fluctuate slightly afterwards.

Conclusion

As of mid-2025, mortgage rates hover around 6.88%, influenced primarily by the Federal Reserve's patient approach to rate cuts amidst cooling-but-not-yet-at-target inflation and a strong labor market, along with the dynamics of the 10-year Treasury yield.

Looking ahead, expert forecasts and Fed projections suggest a gradual downward trend. By the end of 2026, the consensus points towards rates stabilizing around 6.3%, driven by anticipated Fed rate reductions. For 2027, while uncertainty increases with the longer time horizon, a further decline appears likely, potentially bringing 30-year fixed rates into the 5.5% to 6.0% range, assuming the Fed continues its easing path and economic conditions remain stable.

However, this trajectory is not guaranteed. Unexpected shifts in inflation, the resilience of the economy, and global uncertainties could all influence the ultimate path of mortgage rates.

Invest Smarter in a High-Rate Environment

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Today’s 5-Year Adjustable Rate Mortgage Soars to 7.73% – July 3, 2025

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Considering a mortgage in today's market? You're likely seeing some interesting shifts. As of July 2, 2025, the national average for a 5-year Adjustable Rate Mortgage (ARM) has climbed to 7.73%. This is a significant increase and something potential homebuyers – and even current homeowners considering refinancing – need to understand fully.

Let's dive deep into what's driving this increase, how it compares to other mortgage options, and what you should consider before making a decision.

Today’s 5-Year Adjustable Rate Mortgage Soars to 7.73% – July 3, 2025

Let’s start with a snapshot of where different mortgage rates stand as of yesterday, July 3, 2025. This gives us a baseline to understand the relative position of the 5-year ARM.

Loan Type Rate Weekly Change APR Weekly Change
Conforming Loans
30-Year Fixed Rate 6.79% Up 0.01% 7.27% Up 0.03%
20-Year Fixed Rate 6.08% Down 0.18% 6.56% Down 0.07%
15-Year Fixed Rate 5.84% Up 0.03% 6.16% Up 0.05%
10-Year Fixed Rate 5.58% Down 0.12% 5.77% Down 0.23%
7-Year ARM 7.50% Up 0.36% 7.75% Down 0.07%
5-Year ARM 7.73% Up 0.26% 8.09% Up 0.16%
3-Year ARM — 0.00% — 0.00%
Government Loans
30-Year Fixed Rate FHA 6.87% Down 0.37% 7.90% Down 0.38%
30-Year Fixed Rate VA 6.30% Up 0.03% 6.50% Up 0.02%
15-Year Fixed Rate FHA 5.44% Down 0.83% 6.41% Down 0.83%
15-Year Fixed Rate VA 5.79% Up 0.01% 6.10% Down 0.01%
Jumbo Loans
30-Year Fixed Rate Jumbo 7.34% Up 0.19% 7.73% Up 0.17%
15-Year Fixed Rate Jumbo 6.60% Up 0.05% 6.84% Up 0.04%
7-Year ARM Jumbo 7.42% 0.00% 8.00% 0.00%
5-Year ARM Jumbo 7.42% Down 0.05% 7.92% Down 0.02%
3-Year ARM Jumbo — 0.00% — 0.00%

Source: Zillow

Key Takeaways from this table:

  • ARM rates are generally higher than fixed rates: Notice that the 5-year ARM at 7.73% has a higher interest rate than both the 30-year and 15-year fixed-rate mortgages.
  • Rate Volatility: Some rates went up, while others went down. This highlights the dynamic nature of the mortgage market and the importance of staying informed.
  • Jumbo Loans: While this article primarily focuses on conforming loans, it's worth noting the Jumbo Loan rates. Jumbo loans, which exceed conforming loan limits, often have different rate trends.

Why Are 5-Year ARM Rates So High Right Now?

This is the million-dollar question! Normally, you'd expect shorter-term loans to have lower interest rates than longer-term ones. After all, lenders are taking on more risk when they commit to a fixed rate for 30 years versus just 5. So, why is the 5-year ARM so high?

The main reason is something called an inverted yield curve.

  • The Yield Curve: In simple terms, the yield curve is a graph that plots the interest rates (or “yields”) of different U.S. Treasury bonds, from short-term (like 3-month) to long-term (like 30-year).
  • Normal Yield Curve: Usually, the yield curve slopes upward. This means longer-term bonds have higher yields than shorter-term ones. This makes sense because investors demand a higher return for locking up their money for a longer period.
  • Inverted Yield Curve: An inverted yield curve happens when short-term rates rise above long-term rates. This is unusual and often signals that investors are worried about the near-term economic outlook. They believe that in the future, the central bank will need to cut interest rates to stimulate the economy.

Why does this inversion affect ARM rates?

  • ARMs are typically tied to short-term interest rate indices, like the Secured Overnight Financing Rate (SOFR) or the Constant Maturity Treasury (CMT) index.
  • Fixed-rate mortgages, on the other hand, are more closely linked to long-term bond yields (specifically the 10-year Treasury yield).

Because of the inverted yield curve, those short-term indices that ARMs are based on are currently higher than the long-term yields that influence fixed-rate mortgages.

Other Factors Influencing Rates:

The inverted yield curve is the primary driver, but other economic factors contribute to the elevated 5-year ARM rate:

  • Federal Reserve Policy: The Federal Reserve's monetary policy has a significant impact on interest rates. If the Fed is holding steady on interest rates or hinting at future hikes, it can put upward pressure on short-term rates.
  • Inflation Concerns: Lingering concerns about inflation also play a role. If investors believe inflation will remain elevated, they'll demand higher yields on bonds to compensate for the erosion of their investment's purchasing power over time.
  • Government Debt: The level of government debt can also influence interest rates. Higher government borrowing can lead to increased supply in the bond market, potentially pushing yields higher.
  • Economic Data: Strong economic data can sometimes increase rates, as it suggests the Fed may be less likely to cut rates in the near future.

Is a 5-Year ARM Right for You? Weighing the Pros and Cons

Given the current rate environment, is a 5-year ARM a good choice? It depends a lot on your individual circumstances and risk tolerance. Here's a breakdown to consider:

Potential Advantages (in the right circumstances):

  • Lower Initial Rate (Potentially…): I know, I've been saying the 5-year ARM rate is high. But if the yield curve corrects itself and rates come down over the next few years, you could benefit from a lower initial rate compared to a 30-year fixed.
  • Short-Term Homeownership: If you only plan to stay in the home for a few years (less than 5), a 5-year ARM could make sense. You'd get the initial rate and potentially sell before the rate adjusts upward.
  • Anticipating Rate Decreases: If you firmly believe that interest rates will fall significantly in the next few years, an ARM could allow you to take advantage of those lower rates when the loan adjusts.

Potential Disadvantages (Especially in the current market):

  • Rate Risk: This is the biggest concern right now. If rates rise during the adjustment period, your monthly payments could increase significantly.
  • Unpredictability: It's hard to predict exactly where interest rates will be in 5 years. Economic conditions can change rapidly.
  • Higher Initial Rate right now : In 2025, 5-year ARMs are trading higher than a 30 year fixed rate.

Important Considerations Before Choosing an ARM:

  • Your Financial Situation: Can you comfortably afford higher monthly payments if the interest rate on your ARM adjusts upward?
  • Your Risk Tolerance: Are you comfortable with the uncertainty of fluctuating interest rates?
  • The Loan Terms: Understand the specifics of the ARM, including the adjustment frequency (how often the rate can change), the rate caps (the maximum the rate can increase), and the margin (the amount added to the index to determine your interest rate).

Fixed-Rate Mortgage Alternatives: Weighing Your Options

With the uncertainty in the ARM market, many borrowers are opting for the stability of a fixed-rate mortgage. Here's a quick overview:

  • 30-Year Fixed-Rate Mortgage: This is the most popular choice for a reason. It offers payment predictability over the life of the loan. However, you'll typically pay more interest over the long term compared to a shorter-term loan.
  • 15-Year Fixed-Rate Mortgage: You'll pay off the loan much faster and save a considerable amount of interest. However, your monthly payments will be higher.
  • 20-Year Fxd-Rate Mortgage: A sweet spot between 15 and 30 year loans.

Other Strategies for Navigating the Mortgage Market

  • Rate Shopping: Get quotes from multiple lenders. Mortgage rates can vary significantly from one lender to another.
  • Improve Your Credit Score: A higher credit score can qualify you for a lower interest rate.
  • Increase Your Down Payment: A larger down payment reduces the amount you need to borrow and can also help you qualify for a better rate.
  • Consider Government-Backed Loans: FHA and VA loans often have more lenient requirements and lower interest rates than conventional loans.

My Personal Take: Proceed with Caution on ARMs Right Now

Given the current economic uncertainties and the inverted yield curve, I personally believe that most borrowers should exercise caution when considering a 5-year ARM. The risk of rising rates outweighs the potential benefits for many people. The peace of mind that comes with a fixed-rate mortgage is often worth the slightly higher initial rate.

Of course, everyone's situation is different. If you have a strong understanding of the risks and feel comfortable with the potential for rate increases, a 5-year ARM might be a viable option. It's essential to do your research, talk to a qualified mortgage professional, and carefully consider your own financial situation before making a decision.

Capitalize on ARM Rates Before They Rise Even Higher

With fluctuating adjustable-rate mortgages (ARMs), savvy investors are exploring flexible financing options to maximize returns.

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Mortgage Rates Today: The States Offering Lowest Rates – July 3, 2025

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Looking to buy a home or refinance your mortgage? The mortgage rates today are a crucial piece of the puzzle. As of July 3, 2025, the national average for a 30-year fixed-rate mortgage is hovering around 6.79%. But did you know rates can vary quite a bit from state to state? Right now, you'll find some of the lowest rates in New York, California, Massachusetts, Colorado, Connecticut, New Jersey, Utah, and Florida, where rates float between 6.50% and 6.75%. Here's what you need to know.

Mortgage Rates Today: The States Offering Lowest Rates – July 3, 2025

Which States Offer the Sweetest Mortgage Deals Right Now?

Okay, let's dive into where you might find the best rates. As of today, July 3, 2025, here’s a quick rundown 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: Often a competitive market for lenders, potentially leading to better rates.
  • California: High home values can attract lenders, but affordability can be a hurdle.
  • Massachusetts: A strong economy often translates to stable lending environments.
  • Colorado: Growing population and housing demand can lead to varied rate offerings.
  • Connecticut: Similar to Massachusetts, a stable economy can keep rates competitive.
  • New Jersey: Proximity to major financial centers may influence rates.
  • Utah: Rapid growth and development may present unique lending opportunities.
  • Florida: Popular destination with a diverse housing market.

These states are currently showing average 30-year fixed mortgage rates between 6.50% and 6.75%.

Where Are Mortgage Rates on the Higher End?

Unfortunately, not everywhere has the lowest rates. Here are the states where you will find higher mortgage rates:

  • Alaska
  • West Virginia
  • Nebraska
  • Iowa
  • Rhode Island
  • Wyoming
  • North Dakota

Homebuyers in these states face averages between 6.86% and 6.94%.

Why the Big Difference?

You might wonder, why the difference from state to state? Several factors are at play:

  • Lender Competition: Some states have more lenders vying for your business, which can drive down rates.
  • Credit Score Averages: States with higher average credit scores might see slightly better rates overall.
  • Loan Size: The average loan size in a state can influence rates, as larger loans might carry different risk profiles.
  • State Regulations: Different regulations can impact how lenders operate and what rates they offer.

Don't Fall for the “Teaser Rate” Trap

You've probably seen ads boasting crazy-low mortgage rates. Be careful! These are often “teaser rates” designed to lure you in. They come with catches, like needing to pay points upfront (extra fees) or having a near-perfect credit score. The rates I'm sharing are averages, offering a more realistic picture.

National Mortgage Rate Trends: A Bird's Eye View

Looking at the country as a whole, here's what's happening with mortgage rates:

  • Slight Uptick: 30-year rates have nudged up a bit recently, but not by much.
  • Still Lower Than May: Things are better than in mid-May when rates hit a high of 7.15%.
  • Not as Good as Earlier This Year: Back in March, rates dipped to around 6.50%, and last September, they reached a two-year low of 5.89%.

Mortgage Rate Averages

Loan Type Rate
30-Year Fixed 6.79%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.77%
Jumbo 30-Year Fixed 6.79%
5/6 ARM 7.37%

What's Driving These Fluctuations?

Mortgage rates don't just magically appear. Several key factors influence them:

  • The Federal Reserve: The Fed plays a huge role! They control interest rates to manage inflation. When the Fed lowers rates, mortgage rates tend to follow.
  • 10-Year Treasury Yield: This is a big one. Mortgage rates often track the 10-year Treasury yield closely. Investors drive these yields up or down based on their outlook on the economy.
  • Inflation: If inflation is high, rates tend to rise to compensate.
  • The Labor Market: A strong job market can put upward pressure on rates.
  • Global Events: Uncertainty in the world economy can also affect rates.

Peering into the Crystal Ball: What's Ahead for July 2025?

So, what can you expect for the rest of July 2025? Here's what the experts are saying:

  • Stable or Gradually Decreasing: Most predict rates will stay relatively steady or maybe decrease a little.
  • Above 6.5%: Don't expect rates to plummet. Most analysts believe they'll stay above 6.5% for now.
  • No Big Surprises: A dramatic drop is unlikely this month.
  • Minor Ups and Downs: Expect some small fluctuations based on economic news.

Mortgage rates in July 2025 are likely to hang around the mid-to-high 6% range. Things are definitely better compared to what we were seeing the past few months. As someone working in this field, this is welcome news!

Take Control: Compare Rates and Crunch the Numbers

Even though rates can be daunting, the best thing you can do is shop around and use online calculators to estimate monthly payments for different loan scenarios. In doing so please consider the following factors to give you a more accurate estimate:

  • Home price
  • Down payment
  • Loan term
  • Property taxes
  • Homeowners insurance
  • Interest rate on the loan (which is highly dependent on your credit score)

Understanding How Macroeconomic Factors Affect You

Mortgage rates are driven by the bond market, the Federal Reserve's (The Fed) monetary policy, and Lender Competition. The Fed's policy is influenced by unemployment rate, inflation and government debt. Because any number of these can cause fluctuations simultaneously, it's generally difficult to attribute any change to any one factor.

As stated above, the Federal Reserve's monetary policy is a major influencer of mortgage rates. Since November 2021, the Fed is agressively raising interest rates to fight decades-high inflation. Although the fed funds rate does not directly influence mortgage rates given the magnitude of these rate increases its' impact on mortgage rates has been dramatic over the last two years.

Final Thoughts: For me, understanding mortgage rates wasn't easy at first. It took time to learn the ins and outs of these economic factors! The best advice I can give you is to do your homework, and consider working with a financial advisor.

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Today’s Mortgage Rates – July 3, 2025: Drop in Home Loans and Refinance Rates

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As of July 3, 2025, mortgage rates have slightly decreased, with the national average for a 30-year fixed mortgage rate at 6.78%, down from 6.79% the previous week. This subtle shift signals a stable trend in the mortgage market, reflecting broader economic conditions. Similarly, refinancing rates show a comparable pattern as homeowners assess their options to either secure lower payments or cash out equity.

Today's Mortgage Rates – July 3, 2025: Slight Drop in Home Loans and Refinance Rates

Key Takeaways

  • Mortgage Rates: The average 30-year fixed mortgage rate is now 6.78%.
  • Refinance Rates: The 30-year fixed refinance rate has climbed to 7.03%.
  • Comparison: The 15-year fixed mortgage rate stands at 5.80%, presenting a slight decline.
  • Economic Influence: Ongoing economic factors contribute to current rate trends.
  • Future Projections: Experts anticipate rates may stabilize or see minor fluctuations in the upcoming months.

Understanding Mortgage Rates

A mortgage rate is the revolving interest that banks charge for lending money to homebuyers for purchasing real estate. These rates can fluctuate daily based on economic indicators like inflation, employment rates, and geopolitical factors. Mortgage rates are critical because they determine your monthly payment and the total amount of interest you will pay over the life of the loan.

The interest rate you receive can vary based on multiple factors, including:

  1. Credit Score: Higher credit scores usually lead to lower interest rates.
  2. Down Payment: A larger down payment may reduce your rate or eliminate private mortgage insurance (PMI).
  3. Loan Type: Different types of loans (fixed-rate vs. adjustable-rate) have different rates.
  4. Loan Term: Shorter terms generally have lower rates but higher monthly payments.

The landscape for mortgage rates is shaped by conditions in the bond market, particularly the yield on the 10-year Treasury note, which serves as a benchmark. Fluctuations in this yield often reflect investor expectations regarding economic growth and inflation. For instance, when the economy shows signs of growth, investors may sell bonds, causing yields to increase and thus pushing mortgage rates higher.

Today's Mortgage Rates Overview

According to Zillow, the current mortgage rates as of July 3, 2025, include:

Mortgage Program Rate 1W Change APR 1W Change
30-Year Fixed 6.78% -0.01% 7.23% -0.01%
20-Year Fixed 6.46% +0.20% 6.78% +0.16%
15-Year Fixed 5.80% -0.01% 6.09% -0.01%
10-Year Fixed 5.58% -0.12% 5.77% -0.23%
7-Year ARM 7.50% +0.36% 7.75% -0.07%
5-Year ARM 7.65% +0.19% 8.06% +0.13%
3-Year ARM — 0.00% — 0.00%

Government Loans vs. Conforming Loans

When navigating mortgage options, borrowers generally encounter two main categories: conforming loans and government loans.

Conforming loans adhere to guidelines set by government-sponsored enterprises like Fannie Mae and Freddie Mac. These loans often have fixed or adjustable interest rates and are available for varying term lengths. Conforming loans typically have lower interest rates since they are less risky for lenders.

Conversely, government loans, such as FHA and VA loans, are backed by the federal government. They typically offer more flexible qualification criteria and lower down payments, making them attractive for first-time homebuyers.

  • For instance, the current average rate for a 30-Year Fixed FHA Loan is 6.92%, which allows borrowers with lower credit scores or smaller down payments to access financing.
  • A 30-Year Fixed VA Loan is as low as 6.31%, offering unique advantages to veterans and active military members, such as no down payment and no PMI.

Understanding the distinctions between these loan types is crucial for borrowers as they can significantly influence long-term financial commitments.

Today's Refinance Rates

Refinancing can offer homeowners the opportunity to take advantage of lower interest rates or modify their loan terms to better fit their financial situation. As of July 3, 2025, refinance rates have shown a minor increase compared to the previous week. The 30-year fixed refinance rate now averages 7.03%, which reflects the following changes:

Refinance Program Rate 1W Change APR 1W Change
30-Year Fixed 7.03% +0.01% 7.23% -0.01%
20-Year Fixed 6.46% +0.20% 6.78% +0.16%
15-Year Fixed 5.82% -0.03% 6.09% -0.01%
10-Year Fixed 5.58% -0.12% 5.77% -0.23%
7-Year ARM 7.50% +0.36% 7.75% -0.07%
5-Year ARM 7.98% +0.06% 8.06% +0.13%

Projections for Mortgage Rates for July 2025

Looking ahead, experts suggest that mortgage rates may stabilize but will likely remain elevated compared to historical lows. Current projections indicate rates may average around 6.65% to 6.75% in July, influenced by various economic factors:

  • Economic Uncertainty: Persistent concerns over inflation and employment data create an unpredictable climate that may affect rates. Economic growth indicates higher consumer spending, which could drive rates up as the Fed may feel pressured to increase interest rates to cool off spending.
  • Federal Reserve Policy: The Fed has paused its rate adjustments recently, observing economic trends before making any changes. Their decisions greatly influence mortgage rates; a favorable jobs report could lead them to consider adjustments that might elevate rates further.
  • Geopolitical Tensions: Global events can impact investor sentiment, often leading to fluctuations in housing market rates. For example, escalating tensions could lead investors to seek safer assets like U.S. Treasuries, subtly pushing mortgage rates down due to weaker demand for loans.

Should You Refinance?

Given the current environment, many homeowners are weighing their options for refinancing. While some might find little incentive to refinance due to rising rates, others may look into refinancing to adjust their loan terms or access equity. Key considerations include:

  1. Market Conditions: Rates need to drop significantly (perhaps below 6%) for a widespread refinance boom akin to those seen in previous years. Homeowners should monitor the market closely to find ideal windows for refinancing.
  2. Personal Goals: Refinancing can still be beneficial if it aligns with long-term financial goals, such as shortening the loan term or changing from an adjustable-rate to a fixed-rate mortgage. Homeowners should evaluate their individual circumstances and financial objectives.
  3. Debt Consolidation: Some homeowners may consider refinancing to access equity for larger expenses or consolidate debt. Turning high-interest credit debt into a lower-interest mortgage loan can result in significant savings.
  4. Increased Comfort: Furthermore, refinancing can replace an adjustable-rate loan with a fixed-rate loan, leading to predictable payments and less risk over time.

With rates expected to remain relatively stable, weighing options carefully and conducting comprehensive research remains crucial.

Summary:

While today's mortgage and refinance rates show minor decreases, the broader economic environment continues to influence fluctuations we observe in the real estate markets. As potential buyers and homeowners navigate the options in securing home loans or refinancing existing mortgages, it's essential to consider personal circumstances, market conditions, and long-term financial objectives. Armed with knowledge and research, homeowners can make informed decisions that support their financial well-being.

Invest Smarter in a High-Rate Environment

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Today’s 5-Year Adjustable Rate Mortgage Jumps by 4 Basis Points – July 2, 2025

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If you're in the market for a home, you're probably keeping a close eye on mortgage rates. According to Zillow, as of today, July 2, 2025, the national average for a 30-year fixed mortgage is 6.76%, up slightly from yesterday. But the real story is in the 5-year ARM, which has increased 4 basis points to 7.60%. Let's find out what these changes mean for you, why rates are where they are, and what you can expect in the coming months.

Today's 5-Year Adjustable Rate Mortgage Jumps by 4 Basis Points – July 2, 2025

Here's a snapshot of where mortgage rates stand today, compared to last week, according to Zillow:

Conforming Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.76% down 0.02% 7.21% down 0.03%
20-Year Fixed Rate 6.48% up 0.23% 6.82% up 0.19%
15-Year Fixed Rate 5.80% down 0.01% 6.09% down 0.02%
10-Year Fixed Rate 5.62% down 0.08% 5.77% down 0.23%
7-year ARM 7.56% up 0.42% 7.90% up 0.08%
5-year ARM 7.60% up 0.13% 7.98% up 0.05%
3-year ARM — 0.00% — 0.00%

Government Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 6.88% down 0.37% 7.90% down 0.38%
30-Year Fixed Rate VA 6.26% down 0.01% 6.45% down 0.03%
15-Year Fixed Rate FHA 5.34% down 0.93% 6.30% down 0.94%
15-Year Fixed Rate VA 5.77% down 0.01% 6.10% down 0.01%

Jumbo Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.08% down 0.07% 7.50% down 0.06%
15-Year Fixed Rate Jumbo 6.50% down 0.04% 6.79% down 0.02%
7-year ARM Jumbo 7.42% 0.00% 8.00% 0.00%
5-year ARM Jumbo 7.55% up 0.08% 8.03% up 0.09%
3-year ARM Jumbo — 0.00% — 0.00%

Why the Focus on the 5-Year ARM?

You might be wondering why I'm highlighting the 5-year ARM. While the 30-year fixed rate is the most popular choice, the 5-year ARM can be a smart option for some borrowers. Here's the deal:

  • What is an ARM? An Adjustable-Rate Mortgage (ARM) has an interest rate that's fixed for a certain period (in this case, five years) and then adjusts periodically based on market conditions.
  • Who Benefits? ARMs can be attractive if you plan to move or refinance before the fixed-rate period ends. They often start with lower interest rates than fixed-rate mortgages, which can save you money in the short term.
  • The Risk: The big risk with an ARM is that your interest rate could increase after the fixed period, making your monthly payments higher. That's why it's crucial to understand how the rate adjusts and what the maximum possible rate could be.

Why Are Mortgage Rates Relatively High in 2025? The Big Picture

It's no secret that mortgage rates aren't as low as they were a few years ago. Here's a breakdown of the key factors driving today's rates:

  • Inflation Concerns: While inflation has cooled down from its peak, it's still hovering above the Federal Reserve's target of 2%. This puts upward pressure on interest rates.
  • Federal Reserve Policy: The Fed doesn't directly control mortgage rates, but its actions have a big impact. The Fed has been holding steady with its benchmark interest rate to fight inflation. Furthermore, they are shrinking their balance sheet which also increases rates.
  • Economic Uncertainty: The global economy is facing a lot of uncertainty, from geopolitical tensions to concerns about economic growth. This uncertainty can lead investors to buy safer assets like US Treasury bonds, which mortgage rates tend to follow.
  • Rising Federal Debt: The increasing national debt is also a factor, as it can put upward pressure on interest rates.
  • Housing Supply and Demand: While inventory varies by market, in many areas, demand still outstrips supply, keeping prices relatively high. This allows lenders to maintain higher rates.

What Does This Mean for You?

So, how do these factors translate into your home-buying or refinancing decisions?

  • For Buyers: The current rate environment means you'll likely pay more in interest over the life of your loan. It's more important than ever to shop around for the best rates and consider different loan options. Don't just focus on the monthly payment; look at the total cost of the loan.
  • For Refinancers: If you're hoping to refinance to a lower rate, you might need to be patient. Keep an eye on market trends and consider talking to a mortgage professional to see if refinancing makes sense for you.

Looking Ahead: What's in Store for Mortgage Rates?

Predicting the future of mortgage rates is never easy, but here's what experts are saying for the rest of 2025:

  • Fannie Mae Forecast: Fannie Mae predicts that the 30-year fixed-rate mortgage could reach 6.5% by the end of 2025.
  • General Consensus: Most experts anticipate a gradual decline in mortgage rates, fueled by a slowing economy and potential interest rate cuts from the Federal Reserve. The general expectation is that rates will be in the mid-to-upper 6% range.

However, it's important to remember that these are just forecasts. Unexpected events could easily change the trajectory of rates.

Stay Informed and Be Prepared

Here's my personal advice based on years of experience:

  1. Know Your Credit Score: Your credit score is a major factor in determining your mortgage rate. Check your credit report regularly and take steps to improve your score if needed.
  2. Shop Around: Don't settle for the first rate you're offered. Get quotes from multiple lenders to see who can give you the best deal.
  3. Consider All Loan Options: Think beyond the 30-year fixed rate. An ARM or a 15-year fixed rate might be a better fit for your financial situation.
  4. Factor in All Costs: Remember that the interest rate is just one part of the equation. Consider other costs like closing costs, property taxes, and insurance.
  5. Talk to a Professional: A good mortgage broker or lender can help you understand your options and guide you through the process.

Key Takeaway: While the slight increase in the 5-year ARM is worth noting, the broader mortgage market remains dynamic. Stay informed, understand your financial situation, and seek expert advice to make the best decision for your needs.

Navigating the mortgage market can be tricky. But with the right information and a little preparation, you can find a mortgage that works for you. Good luck!

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

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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.

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Expand your portfolio confidently, even in a shifting interest rate environment.

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Today’s Mortgage Rates – July 2, 2025: Rates Edge Up, 30-Year FRM Rises to 6.74%

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As of July 2, 2025, mortgage rates have shown signs of slight fluctuations. According to Zillow, the national average 30-year fixed mortgage rate currently stands at 6.74%, which has seen a minor increase from yesterday's rate of 6.73%. For those interested in refinancing, the average 30-year fixed refinance rate has decreased slightly to 6.93%, down from 7.00%. This trend indicates a bit of relief for potential homebuyers and those looking to refinance their existing mortgages, although the changes remain closely monitored by market analysts.

Today's Mortgage Rates – July 2, 2025: Rates Edge Up, 30-Year FRM Rises to 6.74%

Key Takeaways

  • Current National Average Rates:
    • 30-year fixed mortgage: 6.74%
    • 30-year fixed refinance: 6.93%
  • Week-over-Week Changes: Slight increases and decreases, hinting at market stability.
  • Interest Rate Context: The recent budget bill discussions may be influencing these rates.
  • Market Trends: Homebuyers should stay informed about the ongoing trends as rates may vary.

Understanding Mortgage Rates

Mortgage rates are influenced by various factors, including government policy, inflation, and broader economic conditions. On July 2, 2025, the 30-year fixed mortgage rate saw a slight uptick but fundamentally remains lower than last week's average of 6.79%. The 15-year fixed mortgage rate climbed a small amount to 5.76% while the 5-year ARM (Adjustable Rate Mortgage) has decreased to 7.50%.

Factors Influencing Mortgage Rates

  1. Economic Indicators: Economic growth, inflation rates, and employment statistics play crucial roles in how mortgage rates are set. A strong economy usually leads to higher interest rates due to increased consumer spending and inflation.
  2. Federal Reserve's Monetary Policy: The Federal Reserve influences mortgage rates through its setting of the federal funds rate, which affects how much banks charge each other for lending. When the Fed signals an increase in rates, mortgage rates often follow suit.
  3. Bond Markets: Mortgage rates often mirror the yields on long-term government bonds, particularly the 10-year Treasury note. Investors seeking safety will buy these bonds, driving prices up and yields down, which can lead to lower mortgage rates.
  4. Supply and Demand for Housing: A higher demand for homes typically drives up prices and can lead to higher mortgage rates. Conversely, a surplus of homes can encourage lower rates to stimulate sales.

Current Mortgage Rates Overview

As mentioned, the current rates for various mortgage types reflect slight fluctuations from the previous week. Understanding the different products available can help potential buyers make informed decisions. Below is a table summarizing the up-to-date mortgage rates:

Program Rate (%) 1W Change APR (%) 1W Change
30-Year Fixed 6.74% +0.01% 7.12% -0.08%
15-Year Fixed 5.76% +0.03% 6.01% -0.08%
5-Year ARM 7.50% -0.06% 7.89% -0.02%
20-Year Fixed 6.41% +0.16% 6.64% +0.01%
10-Year Fixed 5.64% -0.06% 5.79% -0.21%

Source: Zillow

Refinance Rates Today

For homeowners looking to refinance, the 30-year fixed refinance rate has dropped to 6.93%, following a lesser rate of 7.00% on the previous day. The 15-year fixed refinance rate has also decreased to 5.75%, suggesting that now might be an optimal time for some homeowners to consider their refinancing options.

Here’s a detailed look at current refinance rates:

Refinance Program Rate (%) 1W Change APR (%) 1W Change
30-Year Fixed Refinance 6.93% -0.07% 7.17% -0.08%
15-Year Fixed Refinance 5.75% -0.02% 6.01% -0.08%
10-Year Fixed Refinance 5.64% -0.06% 5.79% -0.21%
5-Year ARM Refinance 7.79% -0.02% 7.89% -0.02%

Source: Zillow

Future Trends: Are Mortgage Rates Expected to Go Down?

Looking ahead, the question remains: Will mortgage rates continue to decline? Current indicators suggest a careful watch over the Federal Reserve's decisions and the overall economic recovery. Recent market reactions to governmental policies hint that any significant adjustments in the short term might still correlate closely with ongoing fiscal discussions, particularly the outcomes of budget deliberations in Congress.

Current Economic Climate Impact on Rates

As market analysts note, the ongoing discussions in Congress surrounding budget bills could create volatility in the mortgage market. If the government approves measures that stimulate the economy without significantly increasing debt, we may see a more favorable environment for lower mortgage rates. However, any indication of rising inflation, particularly due to increased government spending, could lead to hikes in mortgage rates.

In addition, economic sentiment also plays a vital role. If consumer confidence remains high and spending continues to grow, the Fed may feel pressure to raise interest rates, impacting mortgage affordability.

How to Secure the Best Mortgage Rate in July 2025

Finding the best mortgage rate involves a few prudent steps that every potential borrower should consider:

  • Monitoring Rates: Keeping an eye on weekly updates from reliable sources like Zillow and Bankrate is crucial for tracking real-time changes in rates and identifying favorable opportunities.
  • Lender Shopping: Approach multiple lenders for quotes. The mortgage industry is competitive, and different lenders can offer significantly different rates based on their individual business strategies and customer profiles.
  • Understanding Your Financial Position: Your credit score, income levels, and debt-to-income ratio significantly affect the rates you may be offered. Ensure you have a clear understanding of these factors to be in a strong negotiating position.

Navigating the Refinancing Process

If you already own a home, refinancing can be a smart choice, especially with current rates. Refinancing allows homeowners to adjust their loan terms, either lowering their monthly payments or accessing equity for renovations or other expenses. However, it's essential to evaluate costs against potential savings carefully.

When considering refinancing:

  • Compare current market rates against your existing mortgage rate.
  • Factor in any fees involved in the refinancing process, such as closing costs or origination fees.
  • Think about the long-term implications of extending your loan period if you refinance into a new long-term mortgage.

Conclusion: Navigating the Mortgage Waters

As we step into July 2025, mortgage rates feel like a mixed bag of deals – some great, some meh. Small rate changes can pack a punch when it comes to what you’ll actually pay, so don’t just skim the headlines. Do your homework.

When you’ve got the inside scoop, first-time buyers might snag killer deals, and folks refinancing could tweak their mortgages to free up some breathing room. But here’s the thing: as you ride this wave, always ask yourself – Does this move match my money goals? Keep your eyes on both your wallet and the road ahead.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

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Connect with a Norada investment counselor today (No Obligation):

(800) 611-3060

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Today’s Mortgage Rates: 5-Year ARM Increases by 3 Basis Points to 7.61%

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Feeling confused about the mortgage market? Totally normal! As of July 1, 2025, the 5-year adjustable-rate mortgage (ARM) crept up to 7.61% – a tiny 3-basis-point bump from last week’s 7.58%. Think of it like a slow-rolling hill on a rollercoaster ride. Let’s unpack what this rate wiggle means for buyers, refiners, and the housing market’s vibe. Buying or refinancing is no small move, and these little shifts matter. Your wallet and dream home journey just got a new plot twist – let’s decode it together.

Today's Mortgage Rates: 5-Year ARM Increases by 3 Basis Points to 7.61%

What’s Causing This Rise in 5-Year ARM Rates?

Understanding why 5-Year ARM rates are increasing requires a look at the broader economic environment. Here are factors that could be at play:

  • Inflation Expectations: If investors anticipate higher inflation, they will demand higher returns on their investments, including mortgages.
  • Federal Reserve Policy: The Federal Reserve (also known as the Fed), by raising or lowering interest rates, has a big impact on mortgage rates. If the Fed believes inflation has not come down enough, they can increase these rates.
  • Economic Growth: A strong economy can lead to increased demand for credit, which in turn can push interest rates higher.
  • Bond Market Dynamics: Mortgage rates are closely tied to the yield on 10-year Treasury bonds. When Treasury yields rise, mortgage rates tend to follow.
  • Market Sentiment: Investor confidence and risk appetite can also influence mortgage rates. Times of uncertainty can cause rates to fluctuate.

Breaking Down the Numbers: A Closer Look at July 1, 2025 Mortgage Rates

Let's take a deeper dive into the numbers reported by Zillow on July 1, 2025. To properly understand what is happening with the 5-Year ARM, it helps to view it in the context of other common mortgage products.

Conforming Loans (Loans that meet specific criteria and can be sold to Fannie Mae or Freddie Mac):

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.73 % down 0.06% 7.17% down 0.07%
20-Year Fixed Rate 6.01 % down 0.25% 6.36% down 0.27%
15-Year Fixed Rate 5.72 % down 0.09% 6.01% down 0.10%
10-Year Fixed Rate 5.62 % down 0.07% 5.77% down 0.23%
7-year ARM 7.00 % down 0.14% 7.91% up 0.09%
5-year ARM 7.61 % up 0.15% 7.98% up 0.05%
3-year ARM — 0.00 % — 0.00 %

Government Loans (FHA and VA loans, which are insured by the government):

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 6.44 % down 0.81% 7.46% down 0.82%
30-Year Fixed Rate VA 6.24 % down 0.04% 6.43% down 0.05%
15-Year Fixed Rate FHA 5.19 % down 1.08% 6.15% down 1.09%
15-Year Fixed Rate VA 5.77 % down 0.01% 6.09% down 0.02%

Jumbo Loans (mortgages that exceed conforming loan limits):

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.20 % up 0.05% 7.55% down 0.01%
15-Year Fixed Rate Jumbo 6.57 % up 0.02% 6.74% down 0.07%
7-year ARM Jumbo 7.42 % 0.00 % 8.00% 0.00 %
5-year ARM Jumbo 7.53 % up 0.05% 7.94% 0.00 %
3-year ARM Jumbo — 0.00 % — 0.00 %

Data is current as of July 1, 2025

  • Fixed-Rate Mortgages Generally Lower: Most fixed-rate options have decreased in the past week, indicating a potential cooling in fixed rate demand.
  • ARM Volatility: Adjustable-rate mortgages show mixed movements. The 5-year ARM is notably up, while the 7-year ARM is down. This variance highlights the unpredictable nature of these products.

How Does This Affect You?

Okay, numbers are great, but what does this actually mean for you? Here’s a breakdown:

  • For Homebuyers: If you're considering a 5-Year ARM, this increase means you'll be paying more interest over the initial fixed-rate period. You’ll want to carefully consider if you can comfortably afford potential rate adjustments after those first five years.
  • For Those Refinancing: If you have an existing mortgage, now might not be the ideal time to refinance into a 5-Year ARM, especially if your goal is to lower your interest rate for the long term. It’s always wise to assess and see if a fixed rate is a smarter move for you.
  • For Current 5-Year ARM Holders: If you already have a 5-Year ARM, pay attention to when your rate will adjust. Start preparing for potential higher payments. It might be wise to explore refinancing options to lock in a fixed rate if you're concerned about future increases.

Think of it like driving a car. A fixed rate is like cruise control; you know exactly what's going to happen. An ARM is more like driving manually; you have to constantly adjust to the road and changing conditions.

5-Year ARM vs. Other Mortgage Options: Which Is Right for You?

Choosing the right mortgage is a deeply personal decision. Here's a comparison to help you weigh your options:

  • 5-Year ARM: Great Option if you are planning to move within 5 years or expect a significant increase in income that will offset eventual rate adjustments.
    • Pros: Lower initial interest rate than fixed-rate mortgages, potentially saving money in the short term.
    • Cons: Interest rate can increase after the initial fixed-rate period, leading to higher monthly payments.
  • 30-Year Fixed-Rate Mortgage: Ideal if you prioritize stability and long-term predictability.
    • Pros: Predictable monthly payments for the life of the loan, protecting you from rising interest rates.
    • Cons: Higher initial interest rate compared to ARMs, resulting in higher overall interest paid over the long term.
  • 15-Year Fixed-Rate Mortgage: Good if you want to pay off your home quickly and save on interest.
    • Pros: Significantly lower interest rates than 30-year mortgages, allowing you to build equity faster.
    • Cons: Higher monthly payments than 30-year mortgages, requiring a larger monthly budget.

    Factors to Consider When Choosing a Mortgage:

  • Your Financial Situation: Assess your income, debts, and credit score.
  • Your Risk Tolerance: How comfortable are you with the possibility of rising interest rates?
  • Your Long-Term Plans: How long do you plan to stay in the home?
  • Your Investment Goals: Are you focused on building equity quickly or minimizing monthly payments?

The Fixed-Rate vs. ARM Dilemma: My Personal Thoughts

As someone who has navigated the mortgage market myself, I can tell you that there's no one-size-fits-all answer. If you decide to take on more risk and seek the lower initial costs of an ARM, you need a crystal ball (kidding!). However, what you DO need is enough financial wiggle room that you can breathe easy if things go badly.

Tips for Navigating Today's Mortgage Market

  • Shop Around: Don't settle for the first offer you receive. Compare rates and terms from multiple lenders to ensure you're getting the best deal. Even a small difference in interest rates can save you thousands of dollars over the life of the loan.
  • Get Pre-Approved: Getting pre-approved for a mortgage gives you a clear understanding of how much you can borrow and strengthens your offer when buying a home.
  • Consider Your Credit Score: Your credit score is a huge factor in determining your interest rate. Work to improve your credit score before applying for a mortgage to secure better terms.
  • Factor in All Costs: Don't just focus on the interest rate. Consider all the associated costs, such as origination fees, appraisal fees, and closing costs.
  • Talk to a Professional: Seek guidance from a qualified mortgage broker or financial advisor. They can help you navigate the complexities of the mortgage market and make informed decisions.

The Bottom Line: Stay Informed and Prepared

The slight increase in the 5-Year ARM rate on July 1, 2025 underscores the dynamic nature of the mortgage market. Whether you're a first-time homebuyer, looking to refinance, or already have an ARM, staying informed about market trends and understanding your options is crucial for making sound financial decisions. Don't be afraid to ask questions, do your homework, and seek professional advice.

Capitalize on ARM Rates Before They Rise Even Higher

With fluctuating adjustable-rate mortgages (ARMs), savvy investors are exploring flexible financing options to maximize returns.

Norada offers a curated selection of ready-to-rent properties in top markets, helping you capitalize on current mortgage trends and build long-term wealth.

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U.S. States With Lowest Mortgage Rates Today – July 1, 2025

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Looking for the best mortgage rates? As of today, July 1, 2025, the states offering the cheapest 30-year new purchase mortgage rates are New York, California, New Jersey, Colorado, Connecticut, Florida, and Utah, with averages ranging from 6.56% to 6.72%.

On the other end of the spectrum, the states with the highest refinance rates are Alaska, West Virginia, New Mexico, Mississippi, Nebraska, Rhode Island, and Hawaii, averaging between 6.83% and 6.94%. Let's dive deeper into why these differences exist and what it means for you as a potential homebuyer or refinancer.

U.S. States With Lowest and Highest Mortgage Rates Today – July 1, 2025

Before we continue, I want to just stress importance of doing your own research and consulting professional mortgage lenders to figure out the best option for you.

Why Do Mortgage Rates Vary So Much by State?

It's frustrating, I know. You see a low advertised rate, but when you start looking in your state, it's a completely different story. So, what gives? Several factors contribute to these state-by-state variations:

  • Different Lenders, Different Regions: Not all lenders operate in every state. The competitive landscape varies, and some lenders may specialize in certain regions. Greater competition often translates to better rates.
  • Credit Score Variations: The average credit score of borrowers can differ across states. States with higher average credit scores might see slightly lower rates overall.
  • Average Loan Size: The typical mortgage amount can vary significantly. Lenders might adjust rates based on the risk associated with smaller or larger loan sizes.
  • State Regulations: Mortgage lending is subject to both federal and state regulations. More stringent regulations can sometimes impact rates, either positively or negatively.
  • Lender Risk Management: Each lender has its unique approach to assessing and managing risk. This includes their comfort level with the housing market in specific states, potentially influencing the rates they offer.

The States With The Lowest Mortgage Rates

Here’s a snapshot of the states with the lowest and highest 30-year new purchase mortgage rates as of today, according to Investopedia's analysis and Zillow's data. These states are enjoying some of the most favorable mortgage rates in the nation.

  • New York
  • California
  • New Jersey
  • Colorado
  • Connecticut
  • Florida
  • Utah

These states registered refi averages between 6.56% and 6.72%. Rates as competitive as these are highly sought after in the current market conditions.

You might be wondering, why these states, in particular? Several things help these states stand out:

  • Dense populations provide more opportunity for competition
  • Robust real estate markets
  • High property values
  • Attractive locations

The States With The Highest Mortgage Rates

Unfortunately, not everyone is seeing these sweet rates. Here's a rundown of the states where borrowers are facing the highest mortgage rates as of today:

  • Alaska
  • West Virginia
  • New Mexico
  • Mississippi
  • Nebraska
  • Rhode Island
  • Hawaii

These states face averages between 6.83% and 6.94%. When compared to the states with the lowest mortgage rates, that's quite a jump.

Here's a few things to consider for why these states may be more expensive for the borrower:

  • Rural populations, reducing competition
  • Slower rates of real estate growth
  • High operational costs
  • Weather challenges

National Mortgage Rate Trends: A Broader Perspective

It's crucial to keep in mind how state-level rates fit within the larger national picture. Broadly, the market has calmed down a bit from the volatility we saw earlier in the year. Let's take a look:

  • The national average for a 30-year new purchase mortgages is currently at 6.76%.
  • Rates on 30-year new purchase mortgages have leveled off after dropping 16 basis points last week. Rates as low as these, have not been seen since April 4.
  • In March, 30-year rates sank to 6.50%, their lowest average of 2025.
  • Rates have improved since Mid-May when rates skyrocketed to 7.15%, the highest rate in a year.

Here's a quick summary of national averages for today's top loan types:

Loan Type New Purchase Rate
30-Year Fixed 6.76%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.70%
Jumbo 30-Year Fixed 6.76%
5/6 ARM 7.34%

Important Note About “Teaser Rates”

Be careful when browsing online for mortgage rates! The flashy rates you see advertised (those “teaser rates”) are often not what they seem. They might require you to pay points upfront (essentially, prepaid interest), or they might be based on unrealistic borrower profiles – think ultra-high credit scores and smaller-than-typical loan amounts. The rate you actually qualify for will depend on your individual financial situation (credit score, income, down payment, etc.).

What's Driving These Rate Fluctuations?

You might be wondering what powers these rises and falls. The mortgage market is a complex beast, influenced by a variety of interconnected factors:

  • The Bond Market: 10-year Treasury yields, in particular, play a significant role. Mortgage rates generally move in the same direction as Treasury yields.
  • The Federal Reserve (The Fed): The Fed's monetary policy, especially its involvement in bond buying and funding government-backed mortgages, has huge implications.
  • Lender Competition: The degree of competition among lenders, and across different loan types, affects pricing.

It is important to note that these factors also rely on each other. Because these factors can influence mortgage rates and move simultaneously, it is often difficult to decide what actually causes a given rate.

Let's briefly think about the past few years in order to gain context. Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic's economic pressures. This bond-buying policy is a major influencer of mortgage rates.

  • Starting in November 2021, the Fed began tapering its bond purchases downward, making sizable monthly reductions until reaching net zero in March 2022.
  • Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation.
  • The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023.
  • In September, the central bank announced a first rate cut of 0.50 percentage points, and then followed that with quarter-point reductions in November and December.
  • For its fourth meeting of the new year, however, the Fed opted to hold rates steady.

The Fed's Impact: A Bit More Detail

The Fed's actions have an indirect, but powerful, impact on mortgage rates. For example, when the Fed cut rates, it signaled a greater likelihood of a recession, thus influencing the yields on treasury bonds. The connection between these two rates mean that a rate cut by the FED could actually increase mortgage rates, which is not what most people expect.

In fact, the fed funds rate and mortgage rates move in opposite directions. The Fed's aggressive rate increases in 2022 and 2023 (raising the benchmark rate 5.25 percentage points over 16 months) had a dramatic impact on mortgage rates, pushing them upward. It goes without saying, that given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases, this had a huge impact on the market.

It’s possible the central bank may not make another rate cut for months. With a total of eight rate-setting meetings scheduled per year, that means we could see multiple rate-hold announcements in 2025. We will continue to provide coverage as this occurs.

What Does This Mean for You?

So, what's the takeaway? If you're in the market for a mortgage, here's my advice:

  1. Shop Around Extensively: Don't settle for the first rate you see. Get quotes from multiple lenders to find the best deal for your situation.
  2. Understand the Factors That Affect Your Rate: Your credit score, income, down payment, and the type of loan you choose will all influence the rate you receive.
  3. Be Realistic About “Teaser Rates”: Don't get lured in by ultra-low advertised rates that might not be attainable.
  4. Consider the Big Picture: Watch national trends and try to understand the factors influencing mortgage rates.

Final Thoughts

The mortgage market can be confusing, but by staying informed and doing your research, you can make smart financial decisions. Keep an eye on national trends, compare rates carefully, and don't be afraid to seek professional advice. Buying or refinancing a home is a major decision, so take your time and do it right!

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

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Mortgage Rates Today: 30-Year FRM Drops to 6.73%, 15-Year FRM Dips to 5.71%

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If you're looking for the mortgage rates today, July 1, 2025, the news is cautiously optimistic. While national average rates show a slight downward trend, it's important to understand what's driving these changes and what the experts predict for the near future. According to Zillow, the national average for a 30-year fixed mortgage is around 6.74%. Let's dive into the details and see what's happening.

Mortgage Rates Today: 30-Year FRM Drops to 6.73%, 15-Year FRM Dips to 5.71%

Key Takeaways:

  • 30-Year Fixed Mortgage Rates: Averaging around 6.74%, a slight decrease from the prior week. This is the most common type of mortgage, so its movement is particularly significant.
  • Refinance Rates: Also seeing a minor dip, offering potential opportunities for homeowners. If you've been waiting for a chance to lower your monthly payments, now might be the time to investigate.
  • Expert Predictions: Most experts are forecasting relatively stable rates in the mid-6% range for the coming months. While there's no guarantee, this suggests a period of relative predictability.
  • Federal Reserve (The Fed): Their actions on July 30th could influence rates, but significant cuts are unlikely due to inflation. All eyes are on this upcoming meeting.
  • Inflation: Rising inflation is a wild card that could prevent large rate cuts by the Federal Reserve. Keeping an eye on inflation data is essential for understanding the bigger picture.

Current Mortgage Rates on July 1, 2025: A Closer Look at Loan Types

Let's break down exactly where mortgage rates stand as of today, July 1, 2025. According to Zillow data, we're seeing some movement across different loan types. Understanding these nuances can help you choose the right mortgage for your specific needs.

Here's a table summarizing the current rates for conforming loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.74% down 0.05% 7.18% down 0.06%
20-Year Fixed Rate 6.01% down 0.25% 6.36% down 0.27%
15-Year Fixed Rate 5.71% down 0.10% 5.99% down 0.12%
10-Year Fixed Rate 5.62% down 0.07% 5.77% down 0.23%
7-year ARM 7.00% down 0.14% 7.91% up 0.09%
5-year ARM 7.59% up 0.13% 7.98% up 0.05%
3-year ARM — 0.00% — 0.00%
  • 30-Year Fixed Rate: This is the most popular option because it offers a predictable monthly payment over a long period.
  • 15-Year Fixed Rate: While the monthly payments are higher, you'll pay off your mortgage much faster and save a significant amount on interest over the life of the loan.
  • Adjustable-Rate Mortgages (ARMs): These loans have interest rates that can change over time, based on market conditions. They can be attractive if you expect rates to fall, but they also carry more risk.

And here's a look at government-backed loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 6.75% down 0.50% 7.78% down 0.50%
30-Year Fixed Rate VA 6.19% down 0.08% 6.35% down 0.13%
15-Year Fixed Rate FHA 5.50% down 0.77% 6.46% down 0.78%
15-Year Fixed Rate VA 5.68% down 0.09% 5.95% down 0.17%
  • FHA Loans: These loans are insured by the Federal Housing Administration and are often a good choice for first-time homebuyers or those with lower credit scores.
  • VA Loans: These loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty military personnel, and surviving spouses.
  • Comparing Conforming and Government Loans: When deciding between conforming and government loans, make sure the loan requirements fit your financial situation!

You'll notice that government loans, especially FHA and VA options, often offer attractive rates. This makes them a great choice for first-time homebuyers or those who qualify for these programs. Understanding the differences between these loan types is essential for making an informed decision.

Refinance Rates Today: July 1, 2025 – Is It Time to Refinance Your Mortgage?

For homeowners looking to refinance, there's some good news. Refinance rates are also showing a slight downward trend. This could be an opportunity to lower your monthly payments or shorten your loan term. Let's explore the potential benefits of refinancing.

Here's a snapshot of current refinance rates for conforming loans:

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 7.03% down 0.03% 7.18% down 0.06%
20-Year Fixed Rate 6.02% down 0.25% 6.37% down 0.27%
15-Year Fixed Rate 5.71% down 0.10% 6.00% down 0.12%
10-Year Fixed Rate 5.63% down 0.07% 5.78% down 0.23%
7-year ARM 7.01% down 0.14% 7.90% up 0.09%
5-year ARM 7.59% up 0.13% 7.97% up 0.05%
3-year ARM — 0.00% — 0.00%
  • Lower Monthly Payments: Refinancing to a lower interest rate can significantly reduce your monthly mortgage payments, freeing up cash for other expenses.
  • Shorten Your Loan Term: Refinancing to a shorter loan term, such as from a 30-year to a 15-year mortgage, can help you pay off your mortgage faster and save on interest over the long run. This is a tough decision as monthly commitments drastically change.
  • Switching Loan Types: You can also refinance to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, providing more stability and predictability in your monthly payments.
  • Cash-Out Refinance: If you have equity in your home, you can refinance for more than you currently owe and use the extra cash for home improvements, debt consolidation, or other needs. This can be useful in times of need.

So, Will Mortgage Rates Drop Further in July 2025?

The big question everyone is asking is: Will mortgage rates drop in July 2025? Well, according to top financial experts it is unlikely to see any major rate drops in coming weeks. Most forecasts show mortgage rates staying in approximately the same place. But it's also important to consider other factors that may indirectly affect mortgage rates, such as The Federal Reserve.

Here's a look at predictions from different sources:

  • Long Forecast: Expects an average rate of around 6.71% in July 2025, potentially dipping to 6.68% by the end of the month.
  • Mortgage Bankers Association (MBA): Anticipates rates hovering around 6.7% for the third quarter of 2025 (July, August, September).
  • Other Experts: Major players like Fannie Mae are suggesting rates could fall to around 6.1% by the end of 2025. Wells Fargo anticipates rate dropping to 6.5% by the end of 2025.
Source Mortgage Rate Prediction for July 2025 (30-year fixed)
Long Forecast 6.71% average, closing at 6.68%
Mortgage Bankers Association (MBA) 6.7% average in Q3 2025
National Association of Home Builders (NAHB) Mid-6% range by end of 2025
Fannie Mae 6.1% by end of 2025
Wells Fargo ~6.5% by end of 2025

It's important to remember that these are just predictions, and actual mortgage rates can be influenced by a variety of factors.

The Federal Reserve's Impact on Mortgage Rates

The Federal Reserve (The Fed) plays a huge part in how mortgage rates move. They manage the federal funds rate, which influences all sorts of interest rates. Understanding the Fed's actions and policies is crucial for predicting future mortgage rate trends.

The Fed's most recent meeting in June 2025 concluded with no changes to the federal funds rate, remaining between 4.25% and 4.50%. But they might make two rate decreases to bring down rates by the end of 2025. Others think rates might stay unchanged. These differing perspectives highlight the uncertainty surrounding future rate movements.

Pay attention to the next meeting (July 30, 2025). If the Fed cuts rates, that might lower mortgage rates a bit in late July or early August. If the Fed is still worried about inflation, any rate cuts might not be that big. The Fed's decisions are driven by a complex interplay of economic factors, including inflation, employment, and economic growth.

Inflation: A Key Driver of Mortgage Rates

Inflation can really influence mortgage rates. Usually, higher inflation means higher interest rates. In May 2025, the Consumer Price Index (CPI) rose 2.4% over the past year. This might make it less likely that the Fed will give us big rate cuts. Keeping an eye on inflation data is critical.

The Fed expects PCE inflation to be around 3.0% for 2025, and core PCE inflation at 3.1%. Both are still higher than the Fed's 2% goal. This inflationary pressure could limit the Fed's ability to lower rates significantly.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

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Connect with a Norada investment counselor today (No Obligation):

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