Mortgage rate update for November 25, 2025: Rates are holding firm

Current mortgage rates data:

Coins2Day examined Optimal Blue's most recent data on November 24th, which showed home loans secured by November 21st. 

What's the current situation with mortgage rates in today's market?

It might feel like 30-year mortgage rates have been stuck near 7% for ages, and that's not far from the truth. A lot of market observers expected rates to drop once the Federal Reserve started lowering the federal funds rate last year, but that didn't happen. There was a brief dip before the Fed meeting in September 2024, but rates shot back up soon after.

As of January 2025, the typical interest rate for a 30-year, fixed-rate mortgage surpassed 7%, marking the first instance since last May, based on Freddie Mac data. This represents a substantial jump from the historically low average of 2.65% recorded in January 2021, a period when the government was actively working to stimulate the economy and avert a recession triggered by the pandemic.

Experts predict that, absent another significant crisis, mortgage rates won't return to the 2% to 3% range within our lifetimes. Furthermore, given the uncertain economic forecast under President Donald Trump's policies, such as tariffs and deportations, some analysts have expressed concern that the job market might tighten and inflation could re-emerge. In this environment, American home buyers have consistently encountered elevated mortgage rates, although some have discovered ways to ease their purchase, like negotiating rate reductions with developers when acquiring new homes.

Homebuyers and those looking to refinance mortgages found some good news in late August and early September of 2025. Prior to the Federal Reserve's meeting on September 16-17, mortgage rates began a clear downward trend, reaching their lowest point in nearly twelve months. As anticipated, the Fed implemented a 0.25% decrease in the federal funds rate during that gathering. The monetary authority subsequently enacted another 0.25% reduction to its key rate by the close of October.

Securing the most favorable mortgage rate available

Though economic circumstances are outside your influence, your financial standing as a borrower significantly affects the mortgage rate you receive. Considering this, strive to accomplish the following:

• Ensure your credit is in excellent condition. While a 620 credit score typically suffices for a conventional mortgage (FHA loans might permit scores of 580, or even 500 with a 10% down payment), achieving a significantly lower interest rate, which could save you tens or hundreds of thousands of dollars in interest over the loan's term, requires a much higher score. Blue Water Mortgage, for instance, considers a score of 740 or above to be excellent.
• Maintain a low debt-to-income (DTI) ratio. You can calculate your DTI by dividing your monthly debt payments by your gross monthly income, then multiplying by 100. For example, someone with a $3,000 monthly income and $750 in monthly debt payments has a 25% DTI. When applying for a mortgage, it’s typically best to have a DTI of 36% or below, though you may be approved with a DTI as high as 43%.
• Get prequalified with multiple lenders. It's a good idea to explore options from major banks, community credit unions, and digital lenders, then compare their proposals. Furthermore, speaking with loan representatives at various financial institutions can assist you in determining your lender preferences and identifying the best fit for your requirements. When comparing interest rates, make sure your comparisons are equitable; for instance, if one quote includes the purchase of mortgage discount points and another does not, it's crucial to understand that acquiring points to lower your rate involves an initial expense.

Historical chart of mortgage interest rates

To understand why current mortgage rates around 7% seem elevated, it's important to recall that rates between 2% and 3% are a relatively recent memory. Such low rates were a consequence of extraordinary government interventions designed to avert a recession during the nation's struggle with a global pandemic.

Experts concur that under more standard economic circumstances, we probably won't experience such remarkably low interest rates again. Rates hovering near 7% are historically not considered exceptionally high.

According to a St. Louis Fed (FRED) chart that uses Freddie Mac data for the 30-year, fixed-rate mortgage average, rates from the 1970s to the 1990s were generally typical, except for a notable surge in the early 1980s. Specifically, during September, October, and November of 1981, mortgage interest rates surpassed 18%.

Naturally, this historical context provides scant comfort to property owners who might wish to relocate but are constrained by an unprecedentedly low interest rate. These circumstances are prevalent enough in today's real estate environment that the pandemic-era rates, which prevent homeowners from moving when they might otherwise choose to, have been dubbed the “golden handcuffs.”

Elements influencing mortgage interest rates

The U.S. Economy's condition is likely the primary factor influencing mortgage rates. If lenders grow concerned about inflation, they might increase rates to safeguard their future earnings.

Furthermore, the national debt plays a significant role. When the government's expenditures exceed its revenue, necessitating borrowing, this can lead to increased interest rates.

The need for home financing is also significant. When fewer people are looking for loans, banks may lower interest rates to draw in customers. Conversely, if there's a surge in mortgage applications, lenders might increase rates to manage the increased workload.

The Federal Reserve also has a significant function, with the ability to affect mortgage rates through adjustments to the federal funds rate and by engaging in asset purchases or sales.

The federal funds rate's adjustments are frequently emphasized. Mortgage rates tend to mirror its increases or decreases. However, it's vital to recognize that the Fed doesn't directly determine mortgage rates, nor do they consistently track the fed funds rate precisely.

The Federal Reserve also impacts mortgage rates through its balance sheet. In periods of economic difficulty, it has the capacity to purchase assets such as mortgage-backed securities (MBS) to inject funds into the economy.

However, the Federal Reserve has recently been reducing its balance sheet, allowing assets to mature without renewal. This action typically leads to an increase in mortgage rates. Therefore, while attention is focused on reductions in the fed funds rate, the central bank's management of its balance sheet could have a greater impact on the mortgage rate you're offered. 

The significance of comparing mortgage rates

To secure the most suitable mortgage, it's crucial to compare interest rates across different loan categories and explore options from multiple financial institutions.

Choosing a traditional mortgage could be suitable if you have a strong credit history. Conversely, if your score falls under 600, an FHA loan might offer a possibility that a conventional loan wouldn't.

Investigating choices with various financial institutions, including banks, credit unions, and digital lenders, can substantially impact your total expenses. Freddie Mac's findings suggest that during periods of elevated interest rates, prospective homeowners might reduce their yearly outlays by $600 to $1,200 by seeking quotes from several mortgage providers.