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Mortgage refinance rates have dipped to a one-month low following a three-day slump.

This week, refinance rates for a 30-year loan have plummeted daily, eliminating the brief rise observed during the previous two days. Similarly, rates for other refinance loans have taken a downturn.

This week, daily decreases in 30-year refinance rates have nullified the previous two-day increase...
This week, daily decreases in 30-year refinance rates have nullified the previous two-day increase from last week. Moreover, rates for various refinance loans have also witnessed a decline.

Mortgage refinance rates have dipped to a one-month low following a three-day slump.

Hop on the Mortgage Bandwagon!

Good news, folks! 30-year refinance rates slid another 5 basis points today, diving to an average of 7.09%. That's a three-day plunge of 11 basis points, completely offsetting last week's surge and leaving refi rates significantly improved compared to a May high of 7.32% – a whopping 10-month peak. Today's average matches the lowest reading seen since May 8.

While 30-year refi rates have sunk as low as 6.71% back in March, today's rates still feel rather high. In fact, the current average is about 1.1 percentage points above last September’s 6.01% – a two-year low.

The refinance journey took a mixed toll on other loan types today. The 15-year and 20-year refi averages shed 3 and 7 basis points, respectively. However, jumbo 30-year refi rates saw a 10-point leap on average.

Remember, the rates we share here won't mirror the teaser rates you encounter online. These teaser rates are handpicked to be the most enticing, often involving advanced fees or catering to super-high-credit borrowers. The rate you eventually score will be contingent on factors like your credit score, income, and more – variables which could make it distinct from the averages you see here.

Since mortgage rates vary considerably across lenders, shopping around for your ideal mortgage refinance option is always smart. Even if you're eyeing a specific home loan, comparing rates regularly is essential.

Calculate your monthly mortgage payment scenario using our Mortgage Calculator. Your monthly mortgage payment hinges on your home price, down payment, loan term, property taxes, homeowners insurance, and the interest rate on the loan – a factor heavily influenced by your credit score. Use the inputs below to estimate your potential monthly mortgage payment.

Here we are! Let's crunch some numbers!

Given the dance between macroeconomic and industry factors, mortgage rates zig and zag. Key drivers include:

Market and Economic Factors

  • Federal Reserve Policy: The Federal Reserve's maneuvers, particularly its decisions on the federal funds rate, hold significant sway over mortgage rates. When the Fed hikes its benchmark rate to tackle inflation, mortgage rates usually follow suit[2][5].
  • Inflation: High inflation chips away at the worth of future payments, causing lenders to demand higher interest rates as compensation. This is a crucial accelerator of rate hikes[2][5].
  • Treasury Yields: Mortgage rates have a cozy relationship with yields on long-term U.S. Treasury bonds, particularly the 10-year Treasury[1][4]. A wider gap between Treasury yields and mortgage rates can signal increased lending risk and lead to swollen mortgage rates[1].
  • Demand for Mortgage-Backed Securities (MBS): The vast majority of mortgages are bundled into MBS and sold to investors. If demand for these securities plummets, lenders must offer higher rates to tempt buyers, driving up mortgage rates[1].
  • Term Premium and Prepayment Risk: The term premium signifies the additional yield investors demand for securing long-term investments. Prepayment risk (the possibility that borrowers refinance or sell, repaying loans early) also affects rates, as it can interrupt predicted income from MBS[2].
  • Global and Domestic Economic Conditions: broader economic stability, fiscal policy, and even worldwide economic events can influence investor behavior and, by extension, mortgage rates[2][3].

Individual Borrower Factors

  • Credit Score: People with higher credit scores typically qualify for lower interest rates, as they are considered less risky[1][5].
  • Down Payment Size: A larger down payment reduces a lender’s risk, frequently resulting in a more appealing mortgage rate[1][5].
  • Debt-to-Income (DTI) Ratio: A lower DTI ratio makes borrowers more attractive to lenders and can help secure a lower rate[1][5].
  • Loan Amount and Type: The size of the loan and whether it is fixed or adjustable-rate can impact the rate offered[5].
  • Property Type: Loans for primary residences generally have lower rates in comparison to investment properties[5].

In a Nutshell

As you can see, mortgage rates rise and fall based on a mix of market, economic, and borrower factors. Gaining a grasp on these factors allows borrowers to forecast rate movements and perhaps position themselves for more favorable mortgage conditions[1][2][5].

Data Source:Zillow, Inc., 2025

In light of the current mortgage market trends, personal finance and investing strategies could benefit from considering the 30-year refinance rates, which have seen a recent decline. By keeping an eye on these fluctuations, individuals may find opportunities for refinancing their personal mortgages at more competitive rates.

A deeper understanding of the factors affecting mortgage rates, such as federal reserve policy, inflation, treasury yields, demand for mortgage-backed securities, term premium, prepayment risk, global and domestic economic conditions, credit score, down payment size, debt-to-income ratio, loan amount and type, and property type, can help inpredicting rate movements and potentially securing more favorable conditions in personal-finance investments related to mortgage refinancing.

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