Rates for 30-Year Refinances Increase, Flirting With Unwelcome Limit – March. 26, 2025

Tuesday, rates on 30-year mortgage refinances rose by 2 basis point to a 6.98% median. That continues a bouncing pattern just under 7%—a threshold last crossed in mid-February. The current average is a quarter of a percentage point higher than 2025’s low of 6.71%.

Although still improved vs. this year's high-water mark of 7.30%, reached in January, 30-year refinance rates remain elevated compared to last September's plunge to a two-year low of 6.01%.

Tuesday, rates for other refi loans were mixed. The average 15-year refi loan added one basis point, whereas the average 20-year refi loan climbed 6 points. The jumbo 30 year refi average, meanwhile, decreased by 4 points.

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The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate that you will receive is based on a variety of factors, including your credit score and income.

Since rates vary widely across lenders, it's always wise to shop around for your best mortgage refinance option and compare rates regularly, no matter the type of home loan you seek.

Calculate monthly payment for different loan scenarios using our Mortgage Calculator.

What causes mortgage rates rise or fall?

Mortgage rates are determined through a complex interplay of macroeconomic factors and industry factors such as:

• The direction and level of the bond markets, particularly 10-year Treasury yields
• The Federal Reserve’s current policy on monetary policy. This includes bond purchases and government-backed mortgages.
• Mortgage lenders compete with each other for different loan types.

Because any number of these can cause fluctuations at the same time, it's generally difficult to attribute any single change to any one factor.

Macroeconomic forces kept the mortgage market at a relatively low level for most of 2021. In response to the economic pressures brought on by the pandemic, the Federal Reserve purchased billions in bonds. This bond-buying strategy is a major factor in determining mortgage rates.

Starting in November 2021 the Fed will begin reducing its bond purchases, making significant monthly reductions until reaching net zero by March 2022.

Fed aggressively increased the federal funds rate between July 2023 and then to combat the inflationary levels that have been in place for decades. The fed funds can indirectly influence mortgage rates but not directly. The fed funds rate can actually move in the opposite direction to mortgage rates.

But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.

The Fed kept the federal funds rate at a peak level for nearly 14 months, starting in July 2023. In September, however, the central bank announced its first rate cut, which was 0.50 percentage points. This was followed by a quarter-point reduction in November and December.

For its second meeting of 2025, however, the Fed opted to hold rates steady—and it’s possible the central bank may not make another rate cut for months. The Fed released their quarterly rate forecast at their meeting on March 19, which showed that the central bankers’ median expectations for the remainder of the year were only two quarter-point rates cuts. Eight rate-setting meetings are scheduled each year, so we could see several rate-hold announcements by 2025.

How We Track Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The rates are what borrowers can expect to receive from lenders when they get quotes based on their qualifications. These rates may differ from teaser rates advertised. © Zillow, Inc., 2025. The Zillow Terms and Conditions of Use apply.

Article Sources Investopedia requires that writers use primary sources in order to support their work. These include whitepapers, government data and original reporting as well as interviews with industry experts. We also use original research from other reputable publications when appropriate. Our website contains more information about the standards that we use to produce accurate, unbiased content. Editorial Policy

1. Congressional Research Service "Federal Reserve: Tapering of Asset Purchases," Page 1.

2. Federal Reserve Board. “Summary Economic Projections for March 19, 2025,” page 4.