Mortgage rates are back on the rise as economic uncertainty lingers. On May 12, 2025, average mortgage rates increased across most fixed-term products, tightening affordability for prospective homebuyers.
Today’s mortgage rates
Here’s how today’s national averages compare to last week’s:
| Mortgage type | Rate (May 12) | Change vs. last week |
|---|---|---|
| 30-year fixed | 6.85% | +0.07 |
| 30-year fixed jumbo | 6.85% | +0.05 |
| 15-year fixed | 6.05% | +0.10 |
| 10-year fixed | 6.13% | +0.22 |
| 5/1 ARM | 6.20% | No change |
These rates reflect averages reported by Bankrate from lenders across the U.S.
Why are mortgage rates still high?
Mortgage rates closely track the 10-year Treasury yield, which fluctuates with inflation data, labor trends, and monetary policy expectations. While the Federal Reserve cut rates three times in 2024, it has held firm through early 2025 amid persistent inflation and global trade tensions.
A key driver of today’s rate increases is uncertainty around tariffs and economic growth. Analysts say easing tariffs or a weakening labor market could push the Fed to resume rate cuts—potentially lowering mortgage rates later this year.
“Bond yields will only drop if inflation continues to decline and the economy slows,” said Melissa Cohn, regional VP at William Raveis Mortgage.
Will mortgage rates go down in 2025?
Most forecasts still expect a gradual decline, possibly bringing 30-year rates closer to 6% by late 2025. But a sharp drop below 5.5% remains unlikely without triggering broader economic risks, such as a job-loss recession.
For now, experts believe mortgage rates will likely remain between 6.5% and 7% over the short term.
Which mortgage type is best right now?
Choosing the right mortgage depends on your financial situation and how long you plan to stay in the home:
- 30-year fixed-rate mortgage (6.85%): Offers the lowest monthly payment but the highest total interest paid.
- 15-year fixed-rate mortgage (6.05%): Higher monthly payments but less interest over the life of the loan.
- 5/1 ARM (6.20%): Lower initial rate for the first five years, but adjusts annually afterward—ideal for short-term homeownership plans.
How to find the best mortgage rate
Getting the lowest rate means improving your financial profile and comparing offers:
- Save for a larger down payment – This reduces your loan size and interest paid.
- Boost your credit score – A score of 740 or higher qualifies for the best rates.
- Reduce your debt – A debt-to-income ratio under 36% improves approval odds.
- Explore assistance programs – Some government-backed loans offer better terms.
- Shop multiple lenders – Rates vary significantly across providers.
Key takeaways
- Mortgage rates increased again this week, led by the 30-year fixed average rising to 6.85%.
- Economic uncertainty, inflation, and tariff policy continue to influence bond yields and rates.
- Rates could fall later in 2025—but are unlikely to dip below 5.5% without a major economic downturn.
- Buyers can still prepare by improving credit, saving for a down payment, and comparing multiple lenders.