Mortgage refinance rates update for November 25, 2025

Current refi rates data

Note that Coins2Day reviewed the most recent Zillow data available as of Nov. 24.

Understanding the process of mortgage refinancing

When you refinance your mortgage, you're essentially swapping your current home loan for a new one. Just like when you first got your mortgage, you'll have to go through an application process and satisfy the lender's requirements, which cover aspects like your credit history, proof of income, debt-to-income ratio, and other factors. 

A hard inquiry usually causes a slight drop in your credit score, and you might be rejected if you don't satisfy the lender's criteria.

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

Despite expectations that mortgage interest rates would fall after the Federal Reserve lowered the federal funds rate at the end of last year, these rates have persisted stubbornly around the 7% level for 30-year, fixed-rate mortgages across the country. 

While rates saw a minor decrease near February's close, approaching 6.5%, they are still considerably elevated compared to the 2% to 3% range seen during the pandemic. A Redfin report indicated that by the third quarter of 2024, 82.8% of homeowners with mortgages held rates under 6%. This suggests a substantial number of homeowners are effectively stuck, either unwilling or unable to relocate or refinance given the present high rates. 

However, homeowners experienced some respite beginning in late August and early September of 2025, as mortgage rates began to decline leading up to the Fed's meeting on September 16-17. Rates fell to a level not observed in nearly a year, and the Fed implemented a widely expected decrease of 0.25% to the federal funds rate. The central bank subsequently enacted another reduction of the same magnitude during its October session.

Consider refinancing your mortgage when it seems advantageous.

Refinancing isn’t free, so it’s crucial to weigh the costs before you apply for a refi. 

A common piece of advice suggests that refinancing is worthwhile if you can obtain an interest rate that is a full percentage point below your existing rate. For instance, if your current loan is at 7%, securing a 6% rate through refinancing might be a prudent decision to reduce the total interest paid throughout the loan's term.  

Another option could be a cash-out refinance, allowing you to access your home's equity, though this usually necessitates a minimum of 20% equity. Borrowers generally have considerable freedom in how they spend the funds received from this type of refinance, as there are typically no limitations on the use of the cash obtained. For instance, you could invest the money, use it for a down payment on a second home or investment property, or settle outstanding credit card balances. 

By refinancing, you can also alter your loan's duration. For example, an individual who initially secured a 15-year mortgage but is experiencing financial strain might find it advantageous to switch to a 30-year term, resulting in a lower monthly installment.  

Refinancing also allows for changing loan structures, such as transitioning from an FHA loan to a conventional loan to eliminate the FHA loan's lifelong mortgage insurance premium (MIP), or shifting from an adjustable-rate mortgage (ARM) to one with a fixed interest rate.

The expense involved in refinancing your home loan

When you refinance, you'll encounter closing costs, which usually fall between 2% and 6% of the total loan sum. For instance, on a $300,000 loan, these expenses could be anywhere from $6,000 to $18,000. Typical expenses you might see are:

• 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 applicable with your current loan).

Various kinds of mortgage refinance options

Numerous mortgage refinance loan choices exist, and the most suitable option for you will hinge on your objectives and the kind of mortgage you presently hold. Below are several prevalent refi alternatives:

• Rate-and-term refinance: Many consider this the most common refinance option. It allows for a reduction in your interest rate and/or an adjustment to your loan's duration. Be aware that selecting a shorter term, though it usually results in a reduced rate and significant savings on total interest paid over the loan's life, will lead to increased monthly mortgage expenses.
• Cash-out refinance: A cash-out refinance allows you to access your home's equity by substituting your current mortgage with a new, larger loan and taking out the excess amount in cash. This money can be utilized for numerous reasons, such as home renovations, combining debts with high interest rates, or achieving other financial objectives.
• No-closing-cost refinance: With this type of refi, the lender covers closing costs in exchange for levying a higher interest rate. If you don’t have the cash on hand to pay for closing costs and could otherwise benefit from a refinance, this option might be worth evaluating.
• Streamline refinance: These refis are for existing FHA, VA and USDA loan borrowers, and generally involve less documentation plus offer a more straightforward application and approval process.

Refinancing with your current lender compared to a new one

You don't have to stick with your initial lender for a refinance; exploring other options might lead you to a better interest rate and possibly superior service. 

Your current lender could provide inducements, like forgoing closing fees, should you remain their client. Therefore, you ought to at least discuss the possibility with your existing lender.

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