What you should be aware of regarding today’s mortgage rates:
- Mortgage rates remained relatively stable yesterday. As reported by Money’s daily survey, the average rate for a 30-year fixed-rate loan was 6.639%, a decrease of 0.024 percentage points. Rates for other types of loans stayed the same.
- Mortgage rates are slightly decreasing as lenders factor in the growing likelihood of a September interest rate reduction from the Federal Reserve.
- Rates are still around 6.5%, even with the recent decline, and are projected to stay within this range for the coming days.
- Based on Freddie Mac’s weekly survey, the average rate for a 30-year fixed-rate mortgage was 6.56% for the week that ended on August 28, reflecting a slight drop of 0.02 percentage points. The average rate for a 15-year fixed-rate mortgage remained at 5.69%, the same as the previous week.
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Mortgage rate trends
During a speech on August 22, Federal Reserve Chair Jerome Powell suggested a potential change in the central bank’s monetary approach — comments that were generally seen as indicating a possible interest rate reduction during the Fed’s upcoming meeting in September. Following this, interest rates have dropped as mortgage providers reduced their rates in expectation of the cut.
It remains unclear if interest rates will keep dropping for the rest of the year. Various economic elements, such as inflation and joblessness, can influence how interest rates change and may cause them to rise. Those looking to buy a home and finding a reasonable rate are advised to secure it instead of hoping for more reductions that might not occur.
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Average home loan and refinance rates for August 28, 2025
|
Average mortgage rates on August 28, 2025 |
|
|
Loan terms |
Latest rates |
|
30-year fixed-rate mortgage |
6.639% ? 0.024% |
|
15-year fixed-rate mortgage |
5.946% ? 0.009% |
|
7/1 ARM |
6.133% <=> 0% |
|
10/1 ARM |
6.422% <=> 0% |
|
Average mortgage refinance rates on August 28, 2025 |
|
|
Loan terms |
Lastest rates |
|
30-year fixed-rate refinance loan |
6.687% ? 0.024% |
|
15-year fixed-rate refinance loan |
5.95% ? 0.017% |
|
7/1 adjustable-rate refinance loan |
6.119% ? 0.001% |
|
10/1 adjustable-rate refinance loan |
6.427% <=> 0% |
Source: Muara Digital Team
The daily mortgage rates provided by Money are a national average and represent what a borrower with a 20% down payment, no points, and a 780 credit score—deemed an excellent score that allows access to the most favorable rates—might expect if they applied for a home loan today. These rates are determined by averaging the rates offered by 8,000 lenders to applicants on the previous business day. Your specific rate may differ based on where you live, your lender, and your financial situation.
These figures vary from those of Freddie Mac, which reflect a weekly average derived from a survey of rates provided to borrowers with good credit, a 20% down payment, and reductions for points paid.
If you’re presented with a better rate than anticipated, be sure to inquire about the reason and evaluate proposals from several lenders. (Money’s list of the Best Mortgage Lendersis a great starting point. Homeowners thinking about refinancing their mortgage should look at our list of the Best Mortgage Refinance Companies.)
Use Money’s mortgage calculatorto calculate your monthly payment, taking into account various interest rate situations.
Freddie Mac’s mortgage rates for the week concluded on August 28, 2025
Freddie Mac mortgage rate fluctuations
For its weekly rate analysis, Freddie Mac reviews the rates for the week, which concludes every Thursday. The average rate approximately reflects the rate a borrower with good credit and a 20% down payment might anticipate when applying for a mortgage at this time. Those with lower credit scores typically receive higher rates.
What you should understand about today’s mortgage rates
Mortgage rates, together with property values, play a significant role in the equation of owning a home. Primarily, they can be crucial in deciding the price range of a home you can afford. This guide addresses several frequently asked questions regarding rates and their impact on the real estate market.
Types of mortgage rates
When looking for a mortgage, you might encounter two options, each featuring a distinct approach to interest rates: fixed-rate and variable-rate loans. Knowing the distinction between them is crucial in determining which one will be most appropriate for your situation.
Fixed-rate mortgages
As the name suggests, fixed-rate loans feature an interest rate that remains constant throughout the loan term. The typical loan terms are 30 and 15 years, though some lenders provide additional choices. Usually, the interest rate for a 30-year loan is greater than that for a 15-year loan, but the monthly payment is smaller due to the longer repayment period.
Most homebuyers choose fixed-rate mortgages because they remain the same; the monthly mortgage payments stay fairly consistent during the loan’s duration. Nevertheless, additional expenses often included in the mortgage, such as homeowners insurance and property taxes, may fluctuate, causing changes in your monthly payment over time.
Adjustable-rate mortgages (ARMs)
The interest rate for adjustable-rate mortgages remains constant at the start. Rather, it is fixed for a specific number of years. After this fixed term concludes, the rate becomes flexible and changes at set intervals, referred to as the “adjustment period,” with the duration outlined in the mortgage agreement. Based on market circumstances, the rates may go up or down after each interval.
The typical names for ARMs include 5/6 loans, where the interest rate remains fixed for five years and then changes every six months. Other choices include 7/6 loans and 10/6 loans. Since the interest rates on ARMs are usually lower than those on fixed-rate mortgages during the initial (fixed-rate) period, these adjustable-rate loans can be a suitable choice for borrowers who don’t intend to remain in the home past the fixed-rate term.
Additional details you need to be aware of regarding mortgage interest rates
When evaluating loan offers from various lenders, you will encounter two distinct figures: the interest rate and the annual percentage rate (APR).
The interest rate refers to the fee a lender imposes on the amount of money being borrowed. Think of it as the fundamental expense associated with obtaining funds for a home.
An APRReflects the overall expense of obtaining a loan. It consists of the interest rate along with any charges related to processing the loan. The APR is always greater than the interest rate.
For instance, a $300,000 mortgage featuring a 3.1% interest rate along with $2,100 in charges would result in an APR of 3.169%.
When evaluating loan offers from various lenders, examine both the APR and the interest rate. The APR reflects the true cost of the loan throughout its entire duration, incorporating fees such as origination charges and other lender-related expenses. The interest rate refers to the cost of borrowing the principal amount, without including extra fees. Additionally, you should take into account whether you can afford a larger down payment or prefer to pay over time.
Mortgage refinance rates
Homeowners might choose to refinance for various reasons, such as reducing their interest rate, adjusting the length of their loan, or accessing their home’s equity. Interest rates for refinancing are often higher than those for purchasing a home, so it’s important to thoroughly evaluate the advantages and disadvantages before deciding if a “refi” is the best option.
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Elements influencing current mortgage interest rates
Interest rates alone do not completely dictate the loan’s total cost or the amount of your monthly payment. Several other factors, outlined in the loan disclosures given by your lender, also affect this.
Loan term
In general, the longer the loan term, the lower the payments, but the higher the total cost. Opting for a 15-year mortgage rather than a 30-year one will raise the monthly payment but decrease the total interest paid over the loan’s lifetime.
Loan type
With a fixed-rate mortgage, the payments stay consistent for the entire duration of the loan. In contrast, adjustable-rate mortgages have interest rates that update periodically (following an initial period), causing the monthly payment to fluctuate accordingly.
A loan that surpasses the federal lending limit is referred to as a “jumbo” or “non-conforming” mortgage. These types of loans typically offer lower interest rates but require stricter credit conditions.
Taxes, HOA fees, insurance
Monthly mortgage payments frequently include home insurance costs, property taxes, and homeowners association fees. Consult your real estate agent for an approximate figure of these expenses.
Private mortgage insurance
Private mortgage insurance may amount to 1.5% of your home loan’s annual value. Homebuyers who take out conventional loans can bypass private mortgage insurance by providing a down payment of 20% of the property’s price or by building up equity that equals 20% or more of the mortgage balance. FHA borrowers are required to pay a mortgage insurance premium for the entire duration of the loan.
Closing costs
Closing costs consist of origination fees and additional loan-related expenses. These supplementary charges generally range from 2% to 5% of the mortgage amount and are typically paid at the time of closing. Certain buyers choose to include their home’s closing costs in the loan, which raises the principal balance and results in higher monthly payments.
Loan-to-value ratio (LTV)
The LTV indicates the risk a lender assumes when providing a loan for a property. This number shows the relationship between the loan amount and the property’s value. The greater the LTV, the more risk the lender faces—and consequently, the higher the mortgage rate for the borrower.
Economic factors
Mortgage rates are determined by lenders using a variety of considerations each day. Although each lender’s method may vary slightly, it typically includes the current federal funds rate (a short-term rate established by the Federal Reserve), the rates offered by competitors, and additional elements — occasionally involving the number of staff members available for loan underwriting. Your personal financial standing as a borrower will also influence the rate you receive.
Typically, interest rates follow the yields of the 10-year Treasury note. On average, mortgage rates are generally approximately 1.8 percentage points higher than the yield of the 10-year note. During periods of economic instability, like when inflation is high, Treasury yields often increase. This subsequently causes various interest rates to go up, including those for home mortgages.
How do mortgage interest rates influence the ability to afford a home?
The interest rate on your mortgage can significantly impact the amount of home you can purchase and the amount of your monthly payments. This holds true whether you’re buying your main home, an investment property, or refinancing a current loan.
Here’s an example. If you purchased a $250,000 house and provided a 20% down payment of $50,000, your initial loan amount would be $200,000. For a $200,000 mortgage with a fixed interest rate over 30 years, this is what you would owe:
- At a 3% interest rate, the monthly payment is $843 (excluding taxes, insurance, or HOA fees)
- At a 4% interest rate, the monthly payment is $955 (excluding taxes, insurance, or HOA fees)
- At a 6% interest rate, the monthly payment is $1,199 (excluding taxes, insurance, or HOA fees)
- An 8% interest rate results in a monthly payment of $1,468 (excluding taxes, insurance, or HOA charges)
Experimenting with a mortgage calculatorenables you to discover how a reduced rate or other modifications might affect your payment. Ahome affordability calculatorcan also determine the highest loan amount you might be eligible for considering your income, debt-to-income ratio, mortgage interest rate, and additional factors. TheConsumer Financial Protection Bureaucan also offer a variety of interest rates provided by lenders in each state.
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How to secure the most favorable mortgage rate
One of the most efficient methods for securing the best mortgage rate is to compare offers. As reported by Freddie Mac, borrowers who request a rate from one more lender typically save about $600 throughout the loan term. These savings can reach up to $1,200 if you gather three quotes. Additionally, making a bigger down payment can lead to a reduced interest rate.
The best mortgage lenderYou will be the one who can offer you the best rate and the terms you desire. Your local bank or credit union is a great starting point. Online lenders have increased their presence in the market over the last ten years and claim to pre-approve you in just a few minutes.
You can also decrease the rate you’re offering by purchasing discount points, sometimes referred to as mortgage points. One point usually costs 1% of the loan amount and may lower the interest rate by 0.25 percentage points.
Evaluate different loan options, interest rates, and repayment terms, and ensure your lender offers the specific mortgage you require. Not all lenders provideFHA loans, USDA-backed mortgages or VA loans, for instance. If you’re uncertain about a lender’s qualifications, request its NMLS number and check for online reviews.
After identifying the most favorable rate, secure a rate lock to ensure it remains unchanged until you finalize the loan. Acquiring a pre-approval letter may also be beneficial.
Current mortgage rates FAQ
When can we expect mortgage rates to decrease?
Mortgage rates have been decreasing since reaching a peak of 7.08% in November last year. Although many professionals think rates will eventually drop to around 5%, borrowers should anticipate them staying within the 6% to 7% range for the near term.
Should I commit to my mortgage rate right now?
Yes, securing a mortgage rate lock as soon as your offer on a home is accepted (and you find a rate that suits you) can ensure a favorable rate and manageable monthly payments for your loan. A rate lockThis implies that your lender will ensure your specified interest rate, usually for a period of 45 to 60 days, irrespective of changes in the market. Inquire with your lender about “float-down” features, which enable you to obtain a reduced interest rate if average rates decrease during your locking period. This feature typically involves a fee that varies from 0.50% to 1% of the loan amount.
What are mortgage discount points?
Discount pointsare a method for borrowers to decrease the interest they owe on a home loan. When you purchase points, you’re essentially paying ahead some of the interest the lender charges on the loan. As a result, you receive a reduced interest rate, which may lead to smaller monthly payments and greater savings throughout the loan’s duration. Each mortgage point typically costs 1% of your loan amount and can lower your interest rate by as much as 0.25 percentage points.
Why is my home loan interest rate higher than the typical rate?
You might be facing a mortgage rate that is above average due to several factors. Your credit score, the length of the loan, whether the interest rate is fixed or variable, the size of your down payment, the location of the home, and the loan amount can all influence the rate you receive. One of the most effective methods to reduce your rate is toimprove your credit score.
Various mortgage lenders provide varying interest rates. It is believed that approximately half of all buyers only consider one lender, mainly due to their tendency to rely on recommendations from their real estate agent. However, comparing different lenders can help you obtain the lowest rate available.
Should I refinance my home loan if interest rates decrease?
Refinancing your mortgage when interest rates decrease might be worthwhile if it offers a clear advantage, such as reduced monthly payments or a shorter loan period. Deciding whether now is the right time to do so depends on… right time to refinanceYour home mortgage is influenced by several elements. Many professionals recommend looking into refinancing if your existing mortgage rate is higher than current rates by a minimum of 0.50 percentage points. However, because there are associated costs, it’s not advisable to refinance each time rates slightly decrease.
Current mortgage rate overview
- Mortgage rates remained relatively stable yesterday. As reported by Money’s daily survey, the average rate for a 30-year fixed-rate loan was 6.639%, a decrease of 0.024 percentage points. Rates for other types of loans stayed the same.
- Mortgage rates are slightly decreasing as lenders factor in the growing likelihood of a September interest rate reduction from the Federal Reserve.
- Rates are still around 6.5%, even with the recent decline, and are projected to stay within this range for the coming days.
- As per Freddie Mac’s weekly survey, the average rate for a 30-year fixed-rate mortgage was 6.56% for the week that ended on August 28, reflecting a slight drop of 0.02 percentage points. The rate for a 15-year fixed-rate mortgage remained at 5.69%, the same as it was a week prior.
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