Mortgage rates report Oct. 17, 2025

Current refi rates data

Note that Coins2Day reviewed the most recent Zillow data available as of Oct. 16.

Understanding the process of mortgage refinancing

Boiled down to the basics, a mortgage refinance replaces your existing home loan with a new one. As when you applied for a mortgage to purchase your home, you’ll need to apply and meet lender criteria regarding your credit profile, proof of income, your debt-to-income (DTI) ratio, and more. This process typically results in a small hit to your credit score due to a hard inquiry. And, be aware there’s a risk of denial if you don’t meet the lender’s requirements.

Mortgage rate market update

Despite hopes from some market observers that mortgage interest rates would decline following the Federal Reserve's multiple reductions to the federal funds rate late last year, this did not materialize. Consequently, mortgage rates persisted stubbornly close to the 7% threshold, representing the national average for 30-year, fixed-rate mortgages, for an extended period. 

Rates have long remained well above the pandemic-era lows, when some homeowners were able to get rates in the 2% or 3% ranges. A report from Redfin showed that as of the third quarter of 2024, 82.8% of homeowners with a mortgage had a rate below 6%. Many have been essentially locked in with their existing home loans, unable or unwilling to move or refinance in the current environment.

Homeowners experienced some welcome relief beginning in late August and early September of 2025. Mortgage rates saw a significant decrease prior to the Fed meeting on September 16-17, at which point the central bank implemented a widely anticipated rate cut reduction of 0.25%.

Consider refinancing your mortgage when it could be beneficial.

As we'll explore further in the subsequent section, refinancing your home loan isn't without cost. Therefore, when is it a wise decision to accept the upfront costs and refinance? 

One rule of thumb many experts use is that if you can get a new rate a full percentage point lower than the one you have right now, it’s probably worth refinancing. Using recent market conditions as an example, someone who took out a home loan at 7% should strongly consider a refi if market conditions are in a place where that homeowner could now get a 6% rate.

It may also be strategic to refinance if you want to tap your home equity through a cash-out refi. Be aware you’ll typically need to have at least 20% equity in your home to be able to do this. So, for those who got into their home with the 5% minimum down payment generally available on conventional mortgages, it could take a while before you’re in a place to leverage a cash-out refi. 

A refinance can also be useful for altering your loan duration. For instance, you might have secured a 15-year mortgage initially, anticipating significant interest savings over time despite higher monthly installments. However, if your financial situation shifts and those payments become burdensome, converting to a 30-year loan through refinancing could provide the necessary breathing room with reduced monthly outlays.

Refinancing might be a good option if you're looking to change your loan type. For instance, you might have an FHA loan that includes lifetime mortgage insurance (known as MIP for this loan type) and wish to transition to a conventional loan to eliminate it. Alternatively, you might have initially chosen an adjustable-rate mortgage (ARM) but now plan to remain in your home longer and prefer to avoid potential rate increases during the adjustment phase. In such a scenario, refinancing to a fixed-rate mortgage could be a suitable choice. 

Expenses associated with refinancing your home loan

Similar to the initial mortgage you probably secured to purchase your residence, the process of refinancing a home loan entails closing expenses that typically range from 2% to 6% of the total loan sum. For example, if you opt for a rate-and-term refinance on a $300,000 mortgage, your closing costs for the refinance could fall between $6,000 and $18,000.

Here are some costs you might see listed on your refinance loan estimate:

• Lender origination fees.
• Appraisal fees.
• Title search and insurance fees.
• Loan application fees.
• Survey fees.
• Attorney fees (if required in your state).
• Recording fees.
• Prepayment penalties (if your current loan servicer charges one).

Various kinds of mortgage refinancing options

There are many types of mortgage refinance loans available, and the one you need will depend on your goals and also on your existing mortgage. Here are some common refi options to consider:

• Rate-and-term refinance: This is likely the most popular refi option and offers a chance to lower your interest rate and/or get a different loan term. Just know if you opt for a shorter loan term, while that typically earns you a lower rate and also hefty lifetime interest savings, you’ll be committing to higher monthly payments.
• Cash-out refinance: A cash-out refinance allows you to access your home's equity by substituting your current mortgage with a new, larger one and receiving the excess amount as cash. This money can be utilized for home renovations, combining debts with high interest rates, or for practically any other financial objective.
• No-closing-cost refinance: With this type of refi, the lender covers closing costs but charges you a higher interest rate. If you don’t have cash upfront for closing costs and think you could otherwise benefit from a refinance, this option may be worth a look. But approach it with careful scrutiny.
• Streamline refinance: These are generally available to existing FHA, VA and USDA loan borrowers, and will typically involve less documentation and a more straightforward application and approval process.

Refinancing: existing vs. New lender

You’re not obligated to stick with the lender you got your original mortgage from when you refi. In fact, it’s probably worth shopping around for the lowest rate and best service you can find. 

However, some lenders may offer incentives if you stay with them, such as waiving a portion of the closing costs. Since these upfront charges can be something of a barrier to those who want to refinance, incentives can make a refi more feasible, and it’s worth broaching the conversation with your lender.

If Fannie Mae or Freddie Mac acquired your mortgage, you could qualify for initiatives such as Refi Now and Refi Possible.