Today’s Mortgage Rates – October 5, 2025: 30-Year Fixed Rate Goes Down by 22 Basis Points

As of October 5, 2025, the average 30-year fixed mortgage rate decreased to 6.37%, down 7 basis points from 6.44% the previous day and a notable 22 basis points lower than last week’s 6.59%, according to Zillow. This represents a welcome drop for home buyers looking to lock in more affordable financing. However, refinancing rates tell a different story: the national 30-year fixed refinance rate actually climbed to 7.13%, up 12 basis points from 7.01% last week, signaling mixed conditions in the mortgage market.

Today's Mortgage Rates – October 5, 2025: 30-Year Fixed Rate Goes Down by 22 Basis Points

Key Takeaways:

• 30-year fixed mortgage rates dropped to 6.37% from 6.44% yesterday and 6.59% last week (Zillow).
• 15-year fixed mortgage rates increased slightly to 5.70% from 5.66%.
• 5-year ARM mortgage rates rose sharply to 7.31%.
• 30-year fixed refinance rates increased to 7.13%, encouraging only select refinancing scenarios.
• The Federal Reserve's recent interest rate cut and declining 10-year Treasury yields help explain these mixed moves.
• Experts forecast a gradual easing of mortgage rates to possibly below 6% by 2026, though volatility remains a key challenge.

Today's Mortgage Rates by Loan Type (October 5, 2025)

Loan Type	Rate	1 Week Change	APR	1 Week APR Change
30-Year Fixed	6.37%	↓ 0.22%	6.79%	↓ 0.26%
20-Year Fixed	6.31%	↓ 0.05%	6.81%	↑ 0.17%
15-Year Fixed	5.70%	↑ 0.04%	6.00%	↓ 0.07%
10-Year Fixed	5.84%	0.00%	6.23%	0.00%
7-Year ARM	7.66%	↑ 0.39%	8.32%	↑ 0.59%
5-Year ARM	7.31%	↑ 0.30%	8.05%	↑ 0.25%

Government Loan Rates

Loan Type	Rate	1 Week Change	APR	1 Week APR Change
30-Year Fixed FHA	7.63%	↑ 1.82%	8.67%	↑ 1.85%
30-Year Fixed VA	6.02%	↓ 0.04%	6.19%	↓ 0.03%
15-Year Fixed FHA	5.31%	↓ 0.01%	6.27%	↓ 0.01%
15-Year Fixed VA	5.69%	↓ 0.17%	5.99%	↓ 0.13%

Current Refinance Rates (October 5, 2025)

Loan Type	Rate	1 Week Change
30-Year Fixed	7.13%	↑ 0.12%
15-Year Fixed	5.87%	↓ 0.02%
5-Year ARM	7.44%	↑ 0.02%

Source: Zillow

What Do These Rate Movements Mean for Borrowers?

The drop in the 30-year fixed mortgage rate to 6.37% offers relief for buyers trying to enter the housing market or purchase a new property. Even small declines in mortgage rates can translate into hundreds of dollars saved per month on mortgage payments for typical loan amounts. For example:

• A $300,000 loan at 6.59% (last week’s average) has a monthly principal and interest payment of about $1,912.03.
• The same loan at today’s rate of 6.37% would reduce that monthly payment to approximately $1,895.06.
• That’s a monthly savings of $16.97, which adds up to over $200 annually.

Conversely, the increase in refinancing rates to 7.13% suggests that refinancing is becoming more expensive, which may discourage many homeowners from pulling the trigger unless they have significantly higher previous rates or benefit from shorter refinance terms.

Factors Driving Today's Mortgage and Refinance Rates

The Federal Reserve’s Interest Rate Cut

On September 17, 2025, the Fed cut its benchmark interest rate by 0.25%, the first cut after months of a steady rate environment. This move aimed at reducing borrowing costs in response to persistent inflation still above the target of 2%, measured at 2.9% core PCE year-over-year. While the Fed's cut supports lower short-term interest rates, mortgage rates are set more directly by the 10-year U.S. Treasury yield.

Treasury Yields and Mortgage Rate Spread

The 10-year Treasury yield, a key mortgage rate benchmark, dipped to 4.12% recently. Normally, mortgage rates run about 1-2% higher due to added risk factors. However, market volatility has wide mortgage-Treasury spreads—currently over 2%—which keeps mortgage rates elevated even as Treasury yields fall.

The recent Fed cut and decreasing Treasury yields help explain the modest drop in mortgage rates. However, stubborn inflation and the wide spreads mean declines are gradual, and spikes in refinance rates show lender caution.

Experts’ Forecasts on Mortgage Rates for Late 2025 and Beyond

• National Association of REALTORS® expects mortgage rates to average 6.4% in the second half of 2025 and fall to around 6.1% in 2026.
• Fannie Mae forecasts the 30-year mortgage rate at 6.4% for the end of 2025, dropping to 5.9% in 2026.
• Mortgage Bankers Association predicts a 30-year mortgage rate of about 6.7% by year-end 2025, decreasing to 6.5% by the end of 2026.
• Realtor.com echoes slow easing of rates, with an expected dip to 6.4% by year-end.

These forecasts all hinge on the Federal Reserve’s ability to tame inflation without stalling economic growth, and on whether the mortgage rate spread narrows to more historical levels.

Mortgage Rate Calculations: An Example for Buyers

Let’s consider a hypothetical $350,000 loan, 30-year fixed rate.

Interest Rate	Monthly Payment (P&I only)
6.59%	$2,222.85
6.37%	$2,165.14

At 6.37%, the buyer saves almost $57.71 per month, or roughly $693 annually. For many households, this reduction in monthly mortgage payments can make a significant difference in affordability and purchasing power.

Why are Refinance Rates Different?

Refinance rates tend to reflect factors beyond current market rates because lenders consider the costs of refinancing, longer-term risk, and borrower credit profiles differently than new purchase loans. The increase to 7.13% for 30-year fixed refinance loans suggests lenders are cautious, possibly due to still volatile market conditions or increased loan servicing costs.

The Federal Reserve's Impact on Mortgage Rates: More Than Just a Number

The Fed does not directly set mortgage rates, but its monetary policy decisions influence overall interest rates. The rate cut in September 2025 signaled a shift toward easing borrowing costs. However, the mortgage market’s reaction is muted by:

• Inflation remaining above target.
• Treasury yield volatility.
• Mortgage-Treasury spreads widening due to market risk premium.

This means while the Fed’s move is a positive sign for potential rate declines, mortgage rates remain “sticky” and could fluctuate based on economic data, inflation trends, and investor sentiment.

The Housing Market Context for Buyers and Sellers

• Lower mortgage rates could boost buyer affordability, potentially increasing demand.
• Sellers might respond to rate reductions by listing homes, easing inventory shortages slightly.
• However, if buyer demand outpaces inventory gains, home prices may continue rising, keeping affordability stretched.

Summary Table: Mortgage vs. Refinance Rates October 5, 2025

Type	Rate Today	1 Week Change	Notes
30-Year Fixed Mortgage	6.37%	↓ 0.22%	Lowest in weeks, buyer-friendly
15-Year Fixed Mortgage	5.70%	↑ 0.04%	Slight uptick, still attractive for shorter terms
5-Year ARM Mortgage	7.31%	↑ 0.30%	Rising, more costly adjustable loans
30-Year Fixed Refinance	7.13%	↑ 0.12%	Increasing, refinance less appealing