Mortgage rates declined across the board on May 8, 2025, offering a temporary break for homebuyers and refinancers. According to Zillow data, the average 30-year fixed mortgage rate fell by 10 basis points to 6.69%, while the 15-year fixed rate dipped to 5.97%.
Mortgage rates decrease amid economic uncertainty
The drop in rates follows Federal Reserve Chair Jerome Powell’s comments yesterday about ongoing economic instability. Market uncertainty often leads to volatile mortgage trends. As a result, experts caution that today’s lower rates could rebound quickly.
In the near term, mortgage rate trends will likely stay unpredictable.
Today’s national average mortgage rates
Here are the latest national averages, according to Zillow:
- 30-year fixed: 6.69%
- 20-year fixed: 6.31%
- 15-year fixed: 5.97%
- 5/1 ARM: 7.00%
- 7/1 ARM: 7.24%
- 30-year VA: 6.26%
- 15-year VA: 5.69%
- 5/1 VA: 6.33%
These averages are rounded to the nearest hundredth. Keep in mind that local rates may vary based on your credit score, location, and loan type.
Today’s mortgage refinance rates
Refinance rates also declined today. Here’s where they stand:
- 30-year fixed refinance: 6.77%
- 20-year fixed refinance: 6.34%
- 15-year fixed refinance: 5.95%
- 5/1 ARM refinance: 7.22%
- 7/1 ARM refinance: 7.10%
- 30-year VA refinance: 6.26%
- 15-year VA refinance: 5.80%
- 5/1 VA refinance: 6.28%
Although refinance rates often run slightly higher than purchase mortgage rates, the gap remains relatively small today.
What influences mortgage rates?
Several factors affect mortgage rates. Some you can control, while others depend on the broader economy.
Factors you can control:
- Credit score: Higher scores often mean lower rates.
- Debt-to-income (DTI) ratio: Lenders prefer lower DTI ratios.
- Down payment size: Bigger down payments typically secure better rates.
- Lender shopping: Comparing offers from multiple lenders can lower your rate.
Factors outside your control:
- Economic growth or slowdown
- Federal Reserve monetary policy
- Inflation trends
- Employment rates
When the economy weakens, mortgage rates often drop to encourage borrowing. However, when the economy strengthens, rates tend to rise.
Fixed vs. adjustable mortgage rates
Two common mortgage options are fixed-rate and adjustable-rate mortgages (ARMs).
- Fixed-rate mortgages: Lock in your interest rate for the entire loan term. For example, a 30-year mortgage at 6% keeps that rate for 30 years unless you refinance or sell.
- Adjustable-rate mortgages (ARMs): Start with a fixed rate for a few years, then adjust annually. For instance, a 5/1 ARM stays fixed for five years before fluctuating based on market conditions.
Choosing between the two depends on your long-term housing plans and risk tolerance.
30-year vs. 15-year mortgage terms
Homebuyers often choose between a 30-year and a 15-year fixed mortgage.
- 30-year mortgage: Offers lower monthly payments but results in more interest paid over time.
- 15-year mortgage: Comes with higher monthly payments but less total interest and faster homeownership.
Essentially, a 30-year loan is easier on monthly budgets, while a 15-year loan saves more over the life of the loan.
Key takeaways for mortgage shoppers
- Mortgage rates dipped today but may not stay low for long.
- Economic uncertainty could cause more volatility ahead.
- Locking in a rate soon may benefit buyers and refinancers.
- Shopping around and boosting your credit score can lower your costs.
What happens next?
With the Federal Reserve closely monitoring economic conditions, borrowers should expect continued rate fluctuations. Experts recommend acting quickly if you find a rate that fits your needs.
Using mortgage calculators, improving your financial profile, and consulting trusted lenders can help you secure the best possible deal.