Today’s Mortgage Rates – August 25, 2025: Rates Dip, 30-Year FRM Drops to 6.62%

As of August 25, 2025, mortgage rates have dropped slightly from last week’s averages, offering some relief to homebuyers and refinancers alike. The national average 30-year fixed mortgage rate stands at 6.62%, down 5 basis points from 6.67% the previous week, while refinance rates experienced bigger declines, with the 30-year fixed refinance rate falling to 6.65%, a notable 23 basis point drop from last week.

This trend follows weak job growth and sticky but moderating inflation, leading markets to price in a high chance (around 90%) of Federal Reserve interest rate cuts in September, which could further lower mortgage rates in the near term.

Today's Mortgage Rates – August 25, 2025: Rates Dip, 30-Year FRM Drops to 6.62%

Key Takeaways

• 30-year fixed mortgage rate: 6.62%, down 0.05% from last week.
• 15-year fixed mortgage rate: 5.72%, slightly down.
• 5-year ARM mortgage rate: 7.01%, slightly up.
• Refinance 30-year fixed rate: Dropped significantly to 6.65%, down 0.23%.
• Federal Reserve expected to cut interest rates in September, potentially further reducing mortgage rates.
• Analysts predict mortgage rates will remain above 6% through 2025, possibly dropping toward 6% in 2026.
• Buyers and refinancers should monitor upcoming Fed decisions for favorable rate changes.

Current Mortgage Rates Overview – August 25, 2025

Mortgage rates have shown some movement across different loan types, mostly trending downward after a period of relative stability between 6.6% and 6.8% this year. The persistence of inflation below economists’ expectations combined with weak job data has heightened anticipation of Federal Reserve rate cuts. This has impacted mortgage rates, especially refinance rates, which have fallen more sharply.

Conforming Loan Mortgage Rates

Loan Program	Rate	Change (1 Week)	APR	APR Change (1 Week)
30-Year Fixed	6.62%	-0.05%	7.09%	-0.03%
20-Year Fixed	6.43%	0.00%	6.94%	+0.03%
15-Year Fixed	5.72%	-0.05%	6.03%	-0.04%
10-Year Fixed	5.79%	0.00%	6.09%	0.00%
7-Year ARM	6.63%	-0.57%	7.59%	-0.16%
5-Year ARM	7.01%	-0.12%	7.67%	-0.06%

Government Loan Mortgage Rates

Loan Program	Rate	Change (1 Week)	APR	APR Change (1 Week)
30-Year Fixed FHA	5.78%	-0.24%	6.80%	-0.23%
30-Year Fixed VA	6.21%	0.00%	6.42%	0.00%
15-Year Fixed FHA	5.35%	-0.20%	6.33%	-0.19%
15-Year Fixed VA	6.06%	+0.22%	6.41%	+0.21%

(Source: Zillow Mortgage Rates, August 25, 2025)

Refinance Rates Today: Notable Declines

Refinance mortgage rates have experienced bigger drops than purchase rates. The average 30-year fixed refinance rate fell sharply by 18 basis points just this Monday, reaching 6.65%. This is down 23 basis points compared to last week’s refinance average of 6.88%. Similarly, the 15-year fixed refinance rate declined from 5.69% to 5.61%, and the 5-year ARM refinance rate dropped significantly from 7.52% to 7.12%.

Refinance Rate Comparison

Loan Type	Current Rate	Change from Last Week
30-Year Fixed	6.65%	-0.23%
15-Year Fixed	5.61%	-0.08%
5-Year ARM	7.12%	-0.40%

(Source: Zillow Refinance Rates, August 25, 2025)

How These Rates Affect Borrowers

At today’s rates, buyers and refinancers face rates well above what was standard a few years ago, but rates have softened recently, which matters a lot for monthly payments and overall affordability. For example, on a conventional 30-year, $300,000 mortgage at 6.62%, the estimated monthly principal and interest payment is about $1,919. If rates drop to 6.4%, that monthly payment drops to roughly $1,896—a difference of $23 per month, which adds up.

Refinancers especially notice the benefit when rates decrease. For someone with a $300,000 mortgage currently at 7%, refinancing at 6.65% would cut monthly payments by more than $100, depending on the loan term.

Mortgage Rate Trends and Federal Reserve Influence

Mortgage rates are closely tied to broader economic conditions and Federal Reserve policies. After steady increases in 2022 and 2023 to battle inflation, rates reached their highest points in decades. But in 2025, these rates have begun to ease slightly, particularly due to recent weak job reports and inflation that, while still elevated, has softened enough to tempt the Fed to cut interest rates.

Why Does the Fed Matter?

The Fed’s benchmark federal funds rate indirectly influences mortgage rates. When the Fed raises rates, borrowing costs rise; when it cuts rates, borrowing costs typically fall. After several aggressive hikes, the Fed has hinted at cuts starting as soon as September 2025 to stimulate slower economic growth and maintain price stability.

According to the CME FedWatch tool, there is now an 89-91% chance of a rate cut in the upcoming September 16-17 meeting (source: CME Group FedWatch), which is a key reason traders and lenders have adjusted mortgage rate expectations downward.

Expert Forecasts for the Coming Months

Fannie Mae, Realtor.com, and the Mortgage Bankers Association all project mortgage rates staying above 6% for the remainder of 2025, with some easing expected:

• Fannie Mae forecasts rates ending 2025 near 6.5% and dropping to 6.1% in 2026.
• Realtor.com expects rates to match 2024 averages but decline to about 6.4% by year-end 2025.
• The Mortgage Bankers Association predicts rates will hold mostly steady near 6.7% through late 2025 with a gradual decline toward 6.3% in 2026.

Mortgage originations are also expected to rise modestly as rates moderate, with Fannie Mae projecting $1.85 trillion in mortgage originations for 2025 and $2.26 trillion for 2026.

Understanding Mortgage Rate Types: Fixed vs. ARM

• Fixed-Rate Mortgages (FRM): Rates stay the same for the life of the loan, providing predictable payments. Currently, fixed rates remain above 6%, with the 15-year fixed mortgage rates slightly below the 30-year fixed rates.
• Adjustable-Rate Mortgages (ARM): Generally start with lower rates that adjust periodically. The 5-year ARM average rate has risen to 7.01% but has dropped slightly from last week. ARMs can be attractive if you plan to sell or refinance before adjustment periods.

What This Means for Home Financing Decisions

The marginal drops in mortgage and refinance rates highlight a cautious optimism among lenders and economists looking forward to the Fed’s September actions. While rates remain historically high compared to pre-pandemic years, the recent declines offer opportunities for borrowers who have been waiting for rates to come down.

For buyers, even a small decrease in rates can improve affordability, potentially enabling higher loan amounts or lower monthly payments. For refinancers, current refinancing rates that are notably lower than what many have locked in a year ago could save thousands over the life of a loan if the decision is well timed.

Mortgage Rate Table Summary

Type	Current Rate (Aug 25)	Week Change	Expected Range (Late 2025)
30-Year Fixed	6.62%	-0.05%	Around 6.4% – 6.7%
15-Year Fixed	5.72%	-0.05%	Around 5.6% – 6.0%
5-Year ARM	7.01%	-0.12%	Around 6.7% – 7.0%
30-Year Fixed Refinance	6.65%	-0.23%	Drops toward 6.4% possible

This comprehensive snapshot of mortgage and refinance rates on August 25, 2025, reflects careful adjustments in response to economic signals and anticipation of Federal Reserve actions. While rates remain elevated by historical standards, recent declines and expert forecasts suggest gradual relief on the horizon, with September being a pivotal month for future trends.