Home Buying

Mortgage rates went down again. Here’s how that affects what you owe.

The average rate for a 15-year loan, popular with homeowners looking to refinance, also decreased.

. Bloomberg/File 2024

By MATT OTT, Associated Press

February 6, 2025

1 minute to read

The average rate on a 30-year mortgage in the United States eased for the third week in a row, a smidgen of relief for prospective home shoppers getting into the market before the busy spring home buying season starts.

The average rate fell to 6.89 percent from 6.95 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.64 percent. Five years ago, it stood at 3.45 percent, according to the Federal Reserve Bank of St. Louis.

Here’s how that affects your purchasing power. These calculations are based on a 30-year fixed mortgage on a $500,000 loan with no down payment::

DATE	RATE	MORTGAGE PAYMENT	INTEREST OVER LIFE OF LOAN
2/6/2020 (5 years ago)	3.45%	$2,639.62	$303,264.93
1/30/2025 (last week)	6.95%	$3,718.07	$691,506.23
2/6/2025 (Thursday)	6.89%	$3,697.99	$684,276.52

Source: NerdWallet calculator
Calculations do not include taxes or insurance

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also retreated this week. The average rate fell to 6.05 percent from 6.12 percent last week. A year ago, it averaged 5.9 percent, Freddie Mac said. Five years ago, it stood at 2.97 percent, according to the Feder al Reserve Bank of St. Louis.

Several factors influence mortgage rates, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. The average rate on a 30-year mortgage briefly fell to a 2-year low just above 6 percent last September, but has been mostly rising since then, echoing a sharp rise in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.