Today’s Mortgage Rates – May 4, 2025: Rates Rise Notably by 9 Basis Points

As of May 4, 2025, today's mortgage rates have seen a notable increase. The average 30-year fixed mortgage rate is now at 6.70%, up by nine basis points since last week, while the 15-year fixed rate has also risen to 5.95%. For anyone looking to buy or refinance a home, it's essential to be aware that these higher rates can significantly impact your payments and overall affordability.

Today's Mortgage Rates – May 4, 2025: Rates Have Increased Notably 

Key Takeaways:

• 30-year fixed mortgage rate: 6.70%, up 9 basis points
• 15-year fixed mortgage rate: 5.95%, up 5 basis points
• Mortgage rates are expected to stabilize but remain above 6% throughout 2025.
• Increased rates are a reaction to strong job market data.
• Comparing rates from multiple lenders is crucial in a high-rate environment.

With the mortgage landscape in constant flux, understanding the current rates and factors influencing them is critical for potential homebuyers and homeowners considering refinancing. This blog will delve into today's mortgage rates, the factors influencing these rates, and what they mean for both buying a home and refinancing an existing mortgage.

Current Mortgage Rates

According to the most recent data from Zillow, here are the mortgage rates as of May 4, 2025:

Loan Type	Rate (%)
30-year fixed	6.70%
20-year fixed	6.28%
15-year fixed	5.95%
5/1 adjustable-rate mortgage (ARM)	6.88%
7/1 ARM	7.13%
30-year VA	6.24%
15-year VA	5.66%
5/1 VA ARM	6.32%

Current Mortgage Refinance Rates

Refinancing rates tend to differ slightly from purchase rates. Here are the refinance rates as of May 4, 2025:

Loan Type	Rate (%)
30-year fixed	6.75%
20-year fixed	6.49%
15-year fixed	6.08%
5/1 ARM	7.37%
7/1 ARM	7.47%
30-year VA	6.33%
15-year VA	6.07%
5/1 VA ARM	6.43%

The above rates are rounded to the nearest hundredth, reflecting national averages that can vary by location and lender.

Understanding the Increase in Rates

The upswing in mortgage rates is closely tied to economic indicators, particularly the latest jobs report, which exceeded expectations. When the job market shows strength, as it did recently, it often signals to investors that the Federal Reserve may hold off on cutting interest rates. This can lead to higher mortgage rates as we see today.

How Employment Data Affects Mortgage Rates

When the economy is robust, with job creation rising, it tends to spur inflationary pressures. The Federal Reserve's primary mandate is to maintain price stability and full employment. To combat rising inflation, the Fed may decide to keep interest rates higher for longer, which trickles down to mortgage rates.

What’s Next?

Looking ahead, economists generally expect mortgage rates to taper down somewhat by the end of 2025, although not drastically. Most forecasts suggest that the national average for 30-year rates will still hover around or above 6%. This means prospective home buyers and those considering refinancing should act quickly if they find a rate that meets their budget.

30-Year vs. 15-Year Fixed Mortgage Rates

The choice between a 30-year and a 15-year mortgage primarily revolves around your financial situation and goals.

30-Year Fixed Mortgages

• Rate: 6.70%
• Monthly Payment on a $300,000 Loan: Approximately $1,936
• Total Interest Paid Over 30 Years: About $396,900

The extended term of 30 years lowers your monthly payment, making it easier for many buyers to afford their monthly obligations.

15-Year Fixed Mortgages

• Rate: 5.95%
• Monthly Payment on a $300,000 Loan: Approximately $2,523
• Total Interest Paid Over 15 Years: About $154,225

With a 15-year mortgage, although your monthly payment is higher, you save significantly on interest over the life of the loan.

Adjustable-Rate Mortgages (ARMs)

ARMs are another option that can offer lower initial rates, which may seem attractive in the short term. Here’s a comparison of traditional fixed mortgages and ARMs:

• Initial Rate: Lower than that of fixed-rate mortgages
• Adjustment Period: Fixed for a specific period (e.g., 5 or 7 years)
• Post-Adjustment Risk: After the fixed period, rates may increase based on market conditions

In some cases, we see rates on ARMs starting higher than fixed rates. It's essential to weigh the potential risks of rising rates against the benefits of lower upfront costs.

Should You Refinance Now?

As rates have increased, many homeowners are contemplating refinancing their existing mortgages. The typical thought process is whether the new rate can save enough on a monthly basis to justify the costs associated with refinancing.

When Should You Refinance?

• Potential Savings: Many experts suggest refinancing is justifiable if you can lower your rate by at least 1 percentage point.
• Closing Costs: Determine how long it will take to recoup the costs of refinancing. If you can lower your monthly payment significantly and make up the closing costs within a couple of years, refinancing may be a wise move.

For instance, if refinancing costs you $3,000 but saves you $200 a month, it would take 15 months to recover your costs—this could be beneficial in the long term.

The Fed Rate and Its Impact on Mortgage Rates

The Federal Reserve plays a crucial role in determining the direction of mortgage rates. While mortgage rates don't move exactly in tandem with the Fed's actions, they tend to reflect trends in the federal funds rate.

In 2022-2023, the Fed raised rates to combat inflation. While inflation is decreasing, it remains above the target rate, leading to speculation about future cuts in the federal funds rate. However, recent strong economic data suggests that substantial cuts may not occur until later in 2025.

Expectations for Mortgage Rates Moving Forward

Looking at forecasts by influential entities like Fannie Mae and Freddie Mac, mortgage rates are expected to decline slightly, although not to the historic lows seen in 2020-2021. The consensus is that rates may stabilize around 6.0% by late 2026, depending on economic developments. Homebuyers should be aware that the outlook on rates can shift based on evolving economic factors and Federal Reserve policies.

According to Freddie Mac, many are now anticipating a high-rate environment to last longer than originally expected. Even slight declines or stability at current levels may push prospective buyers to act sooner rather than waiting for lower rates that might never come.

Summary

Mortgage rates as of today reflect a proactive economy responding to recent labor market improvements. By understanding today's mortgage rates' intricacies, consumers can be more prepared in their financial planning, whether for buying a new home or refinancing a current mortgage.