Mortgage Interest Rates Have, Thankfully, Declined Quite A Bit In 2025
Scott P. Rogers
Mortgage interest rates peaked in mid January (first red circle above) at an average of 7.04% for a 30 year mortgage. Since then, they have mostly declined.
Last week (second red circle above) the average 30 year mortgage interest rate was 6.30%.
For much of the past year the median sales price hasn't been climbing very much or very fast... so let's see how a mortgage payment might have differed at the beginning of this year vs. now...
First Time Buyer - $300K purchase - 10% Downpayment
Purchase Price = $300,000
Downpayment = $30,000
Loan Amount = $270,000
Payment @ 7.04% = $2,109
Payment @ 6.30% = $1,976
Savings / Month = $133
Repeat Buyer - $500K purchase - 20% Downpayment
Purchase Price = $500,000
Downpayment = $100,000
Loan Amount = $400,000
Payment @ 7.04% = $3,180
Payment @ 6.30% = $2,984
Savings / Month = $196
So, yes, if you are buying now, you will see somewhat improved ($100 to $200 per month?) mortgage payment compared to what your payments would have been in January.
And, flipping this around a bit, you could also spend the same amount on a mortgage payment as you would have in January and buy a more expensive home.
In January with arbitrary $2,109 / month budget
Purchase Price = $300,000
Downpayment = $30,000
Loan Amount = $270,000
Payment @ 7.04% = $2,109
Now, with arbitrary $2,109 / month budget
Purchase Price = $320,000
Downpayment = $32,000
Loan Amount = $288,000
Payment @ 6.30% = $2,108
Any way you crunch the numbers it seems buyers are winning (more) given current mortgage interest rates being about 0.7% lower now than they were at the start to 2025.
And where might we finish out 2025? Will mortgage interest rates (for a 30 year mortgage) get all the way down to 6%?
