Today’s Mortgage Rates – September 28, 2025: Rates Rise Notably, Borrowing Costs Go Up

Mortgage rates today, September 28, 2025, have increased, with the average 30-year fixed mortgage rate rising to 6.67%. This rate marks a 20 basis point increase from last week’s 6.47%, reflecting a notable upward trend in borrowing costs for homebuyers. Similarly, other mortgage products such as 15-year fixed and ARM (adjustable-rate mortgage) loans have seen increases.

Meanwhile, refinance rates show a mixed picture: the 30-year fixed refinance rate has slightly decreased but remains elevated compared to prior months. These changes are influenced by Federal Reserve policy shifts, inflation trends, and Treasury yield movements.

Today's Mortgage Rates – September 28, 2025: Rates Rise Notably, Borrowing Costs Go Up

Key Takeaways

• 30-year fixed mortgage rate rose to 6.67%, up 20 basis points from last week.
• 15-year fixed mortgage rate increased slightly to 5.76%.
• 5-year ARM mortgage rate climbed to 7.23%.
• 30-year fixed refinance rate dropped modestly to 6.81% but still remains high.
• Federal Reserve interest rate cut aimed at easing borrowing costs, yet mortgage rates remain elevated due to wide mortgage-Treasury spreads.
• Forecasts predict rates possibly dropping below 6% by 2026 if inflation subsides and market volatility decreases.
• Economic factors such as inflation and Treasury yields continue to directly impact mortgage rates.
• Home affordability remains challenged despite slight improvements in refinance opportunities.

Current Mortgage Rates Overview

Mortgage rates have seen an upward push this week, continuing a trend that reflects cautious market sentiment amid economic uncertainty. Here is a detailed breakdown of the current mortgage rates by loan type, using the latest data from Zillow as of September 28, 2025:

Loan Type	Current Rate	1-Week Change	APR	APR 1-Week Change
30-Year Fixed	6.67%	+0.20%	7.03%	+0.13%
20-Year Fixed	6.31%	+0.24%	6.58%	+0.09%
15-Year Fixed	5.76%	+0.11%	5.99%	+0.05%
10-Year Fixed	5.84%	0.00%	6.23%	0.00%
7-Year ARM	7.28%	+0.13%	7.72%	-0.19%
5-Year ARM	7.23%	0.00%	7.74%	-0.11%

Government-Backed Loan Rates

Program	Current Rate	1-Week Change	APR	APR 1-Week Change
30-Year Fixed FHA	7.25%	+1.56%	8.29%	+1.60%
30-Year Fixed VA	5.88%	-0.09%	6.09%	-0.05%
15-Year Fixed FHA	5.37%	+0.09%	6.33%	+0.09%
15-Year Fixed VA	5.65%	-0.03%	6.01%	+0.05%

Analysis: The rise in conventional mortgage rates, especially in the 30-year fixed loan category, signals tighter borrowing conditions for new buyers. The 15-year fixed loans have climbed modestly, reflecting similar market pressures. Government-backed loans like FHA show considerable volatility, especially the 30-year fixed FHA rate spiking by 1.56%, largely due to risk adjustments lenders make.

Today's Mortgage Refinance Rates

Refinancing rates show a slightly different picture. While many borrowers face higher refinancing costs than earlier this year, some positive movements are worth noting:

Refinance Type	Current Rate	1-Week Change	APR	APR 1-Week Change
30-Year Fixed	6.81%	-0.21%	—	—
15-Year Fixed	5.72%	-0.22%	—	—
5-Year ARM	7.41%	+0.06%	—	—

Despite the overall rates being relatively high, the modest drop in the 30-year fixed refinance rate is a potential signal that refinancing could become somewhat more attractive, particularly for people locked into mortgages with higher rates above 6.5%. However, the 5-year ARM refinance rate increased slightly, indicating more volatility in adjustable-rate refinancing options.

How Federal Reserve Policies Impact Mortgage Rates

The Federal Reserve’s recent quarter-point rate cut on September 17, 2025, was aimed at reducing borrowing costs to support economic growth. This cut moved the benchmark rate from a range of 4.25%-4.5% down to 4.0%-4.25% after a pause through the first half of 2025.

Why Did This Matter?

• The Fed’s rate influences the 10-year U.S. Treasury yield, the benchmark that guides mortgage rates.
• Lower Fed rates typically ease Treasury yields, causing lenders to lower mortgage rates.
• Yet the spread between mortgage rates and Treasury yields (currently over 2 points) remains wide, keeping mortgage rates higher despite the Fed’s cut.
• The 10-year Treasury yield was at 4.176% (Sept 26, 2025)—mortgage rates usually add a risk premium above this.

This combination explains why mortgage rates have not fallen significantly, even as the Fed reduced rates.

The Economic Context

• Inflation remains stubbornly above the Fed’s 2% target, with the core PCE inflation rate at 2.9% year-over-year in August 2025.
• The economy grew at a solid rate of 3.8% in Q2 2025, showing resilience even with some labor market softening.
• This inflation-growth balance means the Fed must be cautious about future cuts to avoid reigniting inflation.

Forecasts and Predictions for Mortgage Rates

Multiple authorities in real estate finance offer perspectives on what the coming months might hold:

Source	2025 End Rate Prediction	2026 Rate Forecast	Key Notes
National Association of REALTORS®	6.4% (H2 2025 avg)	6.1%	Rates are the “magic bullet” affecting affordability
Realtor.com	6.4% (end of 2025)	Near 6%	Slow easing expected despite current volatility
Fannie Mae Forecast	6.4%	5.9%	Refinancing share rising to 35% in 2026
Mortgage Bankers Association	6.7% (year-end 2025)	6.5%	Significant volatility expected, refinance chances intermittent

The consensus points to a gradual easing trend, with mortgage rates slowly declining but staying relatively elevated in the near term. For borrowers, this means affordability challenges remain but could improve incrementally next year.

Understanding Mortgage Rate Spreads and Borrower Impact

Mortgage rates usually include a spread over Treasury yields to compensate lenders for risks such as:

• Borrower credit risk
• Prepayment risk (borrowers paying off early)
• Market volatility
• Servicing costs

Normally, this spread hovers around 1-1.5 percentage points, but we've seen it climb over 2 points in 2025 due to economic uncertainty and rising volatility. This has kept mortgage rates from dropping as much as Treasury yields.

Why Should Borrowers Care?

• Even if Treasury yields drop, borrowers might not see immediate large rate declines.
• Lenders price in economic risks, and volatile markets mean wider spreads.
• Refinancing opportunities improve only if spreads narrow along with yields.

Real-World Example: Impact on Monthly Payments

Let’s compare how the recent rate rise affects monthly payments on a typical $350,000 home purchase.

Loan Term	Rate	Monthly Principal & Interest	1-Week Prior Rate	Prior Monthly Payment
30-Year Fixed	6.67%	$2,236	6.47%	$2,214
15-Year Fixed	5.76%	$2,863	5.74%	$2,858

Calculation based on standard fixed-rate mortgage formula, principal $350,000, no taxes or insurance included.

Personal Observation: Even small increases in rates can add significantly to monthly payments, especially over long periods. The 20 basis point rise in the 30-year fixed rate translates to about $22 more per month or roughly $264 extra per year—not small for many families budgeting tightly.

Housing Market Outlook in the Face of Rising Mortgage Rates

Mortgage rates, as the NAR puts it, are a “magic bullet” that directly influence housing demand and affordability. With rates rising or staying elevated:

• Homebuyers face higher borrowing costs, potentially keeping some on the sidelines.
• Homeowners locked into low rates may delay selling, limiting inventory.
• Sellers encounter a mix of fewer buyers and persistent price pressure, especially in supply-constrained markets.

However, the recent Fed rate cut and forecasted easing of mortgage rates next year suggest gradual relief could come—assuming inflation trends remain favorable and market spreads stabilize.