Today’s Mortgage Rates May 9, 2025: Rates Rise Following 10-year Treasury Yield

As of May 9, 2025, mortgage rates have increased slightly, with the average rate for a 30-year fixed mortgage sitting at approximately 6.80%. This rise follows President Trump’s announcement of a new trade deal with the U.K., which has heightened investor optimism about the economy. Such developments can influence mortgage rates as they are often tied to the yields on government bonds, especially the 10-year Treasury yield. Now, let’s delve into the details of today’s mortgage and refinance rates, their trends, and what factors might be affecting them.

Today's Mortgage Rates May 9, 2025: Rates Rise Following 10-year Treasury Yield

Key Takeaways

• Current Trends: Mortgage rates have increased due to favorable economic news.
• Daily Fluctuations: Rates can change often, based on economic conditions and investor sentiment.
• Different Types of Loans: 30-year fixed and refinance rates are most common, but rates vary by loan type.
• Market Influences: Trade agreements, inflation, and Federal Reserve policy can all play a role in rate adjustments.

Current Mortgage Rates

Accurate as of May 9, 2025, here are the latest mortgage and refinance rates:

Mortgage Type	Average Rate Today
30-Year Fixed	6.76%
20-Year Fixed	6.00%
15-Year Fixed	6.05%
7/1 ARM	7.28%
5/1 ARM	7.13%
30-Year FHA	5.95%
30-Year VA	6.37%

Source: Zillow

Current Refinance Rates

For homeowners looking to refinance, these are the average rates available today:

Mortgage Type	Average Rate Today
30-Year Fixed Refinance	6.82%
20-Year Fixed Refinance	6.47%
15-Year Fixed Refinance	6.02%
7/1 ARM Refinance	7.40%
5/1 ARM Refinance	7.78%
30-Year FHA Refinance	5.75%
30-Year VA Refinance	6.31%

Source: Zillow

Understanding Mortgage Rates

Mortgage rates represent the interest charges you incur when borrowing money to purchase a home. These rates can significantly affect your monthly payments and the overall cost of buying a home. Here’s what you need to know about how these rates are determined and why they fluctuate:

1. Economic Conditions: General economic performance, including inflation rates and employment figures, play a big role in determining mortgage rates. If the economy is thriving, rates might go up as demand for loans increases. Conversely, if the economy falters, rates may decrease as lenders try to encourage borrowing.
2. Federal Reserve Policy: The Federal Reserve's monetary policy affects interest rates indirectly. While mortgage rates aren’t set by the Fed, they often fluctuate in anticipation of Fed actions, such as changes in the federal funds rate. For instance, the Fed’s actions in 2022 and 2023 to increase rates to combat inflation have had a lasting impact on current mortgage rates.
3. Investor Sentiment: Investor confidence can significantly influence mortgage rates. When investors are optimistic about future economic performance, they tend to seek higher yields, pushing up rates. Conversely, during economic uncertainty, demand for mortgage-backed securities may drop, leading to lower rates as lenders attempt to stimulate borrowing.
4. Personal Financial Profile: Your credit score, debt-to-income ratio, and the size of your down payment also influence your individual mortgage rate. A higher credit score typically leads to better rates, while a lower score may result in higher borrowing costs.

Trends Over Time: A Historical Perspective

Looking at historical data, we see that rates have been on a general upward trajectory since reaching historic lows in 2020. At that time, many borrowers benefited from rates below 3%, creating a refinancing boom. Since then, fluctuations have been primarily driven by economic recovery, inflation concerns, and Federal Reserve interventions.

As of today, many analysts believe rates could stabilize around 6% to 7% in the coming months. This projection remains contingent on the economic environment, particularly inflation trends, which, despite improvements, are still somewhat above the Fed's target rate.

The Influence of Trade Deals and Economic News

Recent announcements regarding trade agreements, such as the one President Trump touted with the U.K., have reacted instantly in the market. As optimism surged, so did the yields on U.S. Treasury bonds, leading to a corresponding rise in mortgage rates. This phenomenon illustrates the sensitive nature of mortgage rates to global economic events.

When good news hits the markets, it often motivates investors, who then shift their expectations for how the economy will perform in the future. This change in sentiment can cause short-term jumps in yields — and, as a result, mortgage rates. Therefore, staying updated on news events and understanding their broader impacts can help borrowers navigate borrowing decisions more effectively.

How Mortgage Rates Work

When you take out a mortgage, you’re borrowing money to buy a home, which you then pay back over time with interest. Here’s a breakdown of how payments typically work:

• Monthly Payments: A portion of each payment goes towards the principal (the original loan amount), while the remaining amount covers interest. Over time, as you pay down the loan, the interest portion decreases, and more of your payment goes toward the principal.
• Amortization Schedule: This is an essential tool that shows how your payments are divided between interest and principal over the loan's life. Understanding this schedule can provide valuable insight into how quickly you’re building equity in your home. For example, consider a $300,000 mortgage at a 6.5% interest rate. In the early years, the bulk of your payment may cover interest, but over time, this shifts toward paying off the principal.

Here’s a simple illustration:

• At the start, your monthly payment on a $300,000 loan at 6.5% would be approximately $1,896, with about $1,625 going towards interest in the first month.
• After ten years, your payment would remain the same, but more of it — about $1,150 — would contribute toward reducing the principal balance.

This gradual shift demonstrates the power of time in mortgage repayment, showing how equity can be built over years of consistent payments.

How Often Do Mortgage Rates Change?

Mortgage rates can fluctuate daily. They may be influenced by shifts in investor sentiment, economic indicators, and changes in governmental policies. Generally, rates remain stable during periods of economic certainty but can swing widely based on unexpected news events.

For instance, if economic conditions turn turbulent or inflation unexpectedly rises, lenders may preemptively raise rates to mitigate their risk. On the other hand, if indicators suggest a slower economy or declining inflation, lenders might reduce rates to entice borrowers.

Shopping for Mortgage Rates

In today’s market, potential borrowers should take the extra step to shop around for rates. Not all lenders offer the same rates or terms, and doing thorough research can save substantial amounts over time.

• Compare Offers: Experts recommend getting quotes from several lenders — at least three — to understand the range of available rates. Pay close attention not only to interest rates but also to any associated fees or discounts that may be included in the offer.
• Look Beyond Rates: While it might be tempting to go for the lowest rate, consider other factors, such as customer service and the lender’s reputation. A loan with slightly higher rates but exceptional service and flexible terms may ultimately be more beneficial.

Should you be early in the home-buying process, applying for pre-approval will allow you to receive estimates of rates while still searching for properties. If you’ve already secured a contract for a home, applying for regular approval will provide a more accurate sense of what you’ll pay with that specific lender.

Conclusion

For May 9, 2025, the mortgage market reflects a complex interplay of economic news, personal finance decisions, and market trends. With fixed rates hovering around 6.80% and refinance options remaining competitive, it’s essential for borrowers to stay educated about the latest developments.

Understanding how rates are set, the factors that influence them, and the historical context can empower potential buyers or homeowners considering refinancing to make informed decisions aligned with their financial goals.