Mortgage Refinance Rates Forecast 2025: When to Lock In The Best Rates
Expert predictions on mortgage refinance rate trends for 2025 and strategic timing advice for homeowners considering refinancing.
2025 Refinance Landscape: Will Rates Finally Drop?
If you've been waiting for the perfect moment to refinance your mortgage, 2025 might be the year you've been waiting for. After reaching a peak of 7.04% in January 2025, mortgage rates have been on a choppy downward trajectory, with experts now forecasting continued improvements throughout the year.
This comprehensive guide analyzes current refinance rate trends, expert predictions for 2025, and provides actionable strategies to determine if and when refinancing makes financial sense for your specific situation.
Current Refinance Rate Trends
As of June 2025, the average 30-year fixed refinance rate sits at 6.89%, while 15-year fixed rates average 6.15%. These rates represent a significant improvement from the nearly 8% rates seen in late 2023, but still remain well above the sub-3% rates that many homeowners locked in during 2020-2021.
Key Refinance Rate Indicators (June 2025)
- 30-Year Fixed Refinance: 6.89% (down from 7.04% in January)
- 15-Year Fixed Refinance: 6.15% (down from 6.38% in January)
- 5/1 ARM Refinance: 5.92% (down from 6.21% in January)
The slight downward trend we're seeing can be attributed to several factors: a cooling inflation rate (now at 2.9%, down from 3.4% at the start of 2025), the Federal Reserve's initial rate cuts, and stabilizing economic conditions.
Expert Predictions: Where Refinance Rates Are Heading
Looking ahead to the remainder of 2025, most major housing authorities and financial institutions predict continued improvement in mortgage rates, which directly impacts refinance opportunities:
| Housing Authority | 30-Year Fixed Rate Forecast (End of 2025) |
|---|---|
| Fannie Mae | 5.7% |
| Freddie Mac | 6.4% |
| Mortgage Bankers Association | 5.8% |
| National Association of Realtors | 6.0% |
| National Association of Homebuilders | 5.9% |
| Wells Fargo | 5.9% |
| Average Prediction | 5.95% |
According to Lawrence Yun, chief economist at NAR: "Mortgage rates can go down with Fed rate cuts if inflation is under control. But it's not going to go down to 4% mortgage rate conditions because of our huge national debt... It cannot go to 4%, and it cannot go to 5%, but it can go to 6% with the Federal Reserve rate cuts and calmer inflation."
Fannie Mae's May Economic and Housing Outlook offers one of the most optimistic forecasts: "We forecast mortgage rates to end 2025 and 2026 at 6.1% and 5.8%, respectively, down from 6.2% and 6% in our prior forecast."