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Mortgage rates drop for the 4th straight week. What it means for you.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, rose this week.
The average rate on a 30-year mortgage in the United States eased for the fourth week in a row, an encouraging sign for prospective home shoppers as the spring homebuying season gets underway.
The average rate fell to 6.87 percent from 6.89 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.77 percent Five years ago, it sat at 3.47 percent, according to the Federal Reserve Bank of St. Louis.
Here’s how these rates affect 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 |
|---|---|---|---|
| 2/13/2020 (5 years ago) | 3.47% | $2,645.19 | $305,269.12 |
| 2/6/2025 (last week) | 6.89% | $3,697.99 | $684,276.52 |
| 2/13/2025 (Thursday) | 6.87% | $3,691.31 | $681,870.56 |
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, rose this week. The average rate increased to 6.09 percent from 6.05 percent last week. A year ago, it averaged 6.12 percent, Freddie Mac said. Five years ago, it was 2.97 percent, according to the Federal Reserve Bank of St. Louis.
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Mortgage rates are influenced by several factors, 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 two-year low last September, but has been mostly hovering around 7 percent this year. That’s more than double the 2.65 percent record low the average rate hit a little over four years ago.
Rising home prices and elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many prospective home shoppers on the sidelines, especially first-time shoppers who don’t have equity from an existing home to put toward a new home purchase.
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Sales of previously occupied US homes fell last year to their lowest level in nearly 30 years, extending a national home sales slump that began in 2022 as mortgage rates began to climb from their pandemic-era lows.
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