Are you struggling with high mortgage rates? As of July 2025, U.S. 30-year mortgage rates remain stubbornly near 7%, making refinancing an expensive proposition for homeowners. Let’s break down what this means for your wallet and whether refinancing still makes sense.
Why Are Mortgage Rates Still So High?
Despite Federal Reserve rate cuts in late 2024, 30-year mortgage rates have hovered around 7% for most of 2025. Here’s a quick comparison of current rates:
- 30-year fixed-rate: 6.84%
- 15-year fixed-rate: 5.90%
- 10-year fixed-rate: 5.94%
- Jumbo 30-year: 8.06%
Is Refinancing Worth It at These Rates?
Refinancing comes with significant costs – typically 2-6% of your loan amount. For a $300,000 mortgage, that’s $6,000-$18,000 upfront. Experts suggest refinancing only makes sense if you can secure a rate at least 1% lower than your current mortgage.
The Lock-In Effect: Why Most Homeowners Are Staying Put
Redfin reports 82.8% of homeowners have rates below 6%, creating a ‘lock-in effect’ where people stay with their existing mortgages rather than refinancing at higher rates.
What Are Your Refinancing Options?
If you must refinance, consider these options:
- Rate-and-term refinance: Adjust your rate or loan term
- Cash-out refinance: Access home equity (requires 20% equity)
- Streamline refinance: For government-backed loans (less paperwork)
- No-closing-cost refinance: Higher interest rates but lower upfront costs
Should You Refinance Now? The Bottom Line
With rates near 7%, refinancing only makes sense for specific situations. Carefully weigh the costs against potential long-term savings before making a decision.
Frequently Asked Questions
What is the current average 30-year mortgage rate?
As of July 2025, the average 30-year fixed-rate mortgage is 6.84%.
When does refinancing make sense?
Generally when you can secure a rate at least 1% lower than your current mortgage and plan to stay in the home long enough to recoup closing costs.
What are typical refinancing costs?
Expect to pay 2-6% of your loan amount in closing costs, including lender fees, appraisal charges, and title insurance.
Can I refinance with less than 20% equity?
Yes, but you may need to pay private mortgage insurance (PMI) and might not qualify for cash-out refinancing.
How do jumbo loan rates compare?
Jumbo loans currently have significantly higher rates – 8.06% for 30-year and 8.41% for 15-year terms.
