M
ortgage rates have seen a slight increase, with the national average 30-year fixed mortgage rate rising to 6.71%, up 4 basis points from last week. However, markets are anticipating a potential interest rate cut by the Federal Reserve in September, which could lead to lower mortgage rates in the coming weeks.
Key Takeaways:
* The 15-year fixed mortgage rate remains steady at 5.80%.
* Refinance rates have also increased modestly, with 30-year fixed refinance rates at 6.94%.
* Most forecasts predict mortgage rates will stay above 6% through 2025 and not drop below 6% until Q3 2026.
* The Federal Reserve's anticipated rate cut could stimulate a decline in mortgage rates.
The current mortgage rates reflect ongoing inflation concerns and the Fed's cautious approach to monetary policy. Despite some investors anticipating relief from lower borrowing costs, refinance rates remain elevated for now.
Loan Type
Rate (Aug 20, 2025)
Weekly Change
APR
APR Weekly Change
30-Year Fixed
6.71%
+0.04%
7.15%
+0.03%
20-Year Fixed
6.43%
-0.24%
6.90%
-0.08%
The Federal Reserve's monetary policies drive mortgage rate trends significantly, with the Fed moving from ultra-low interest rates to aggressive rate hikes starting in 2022 to fight inflation. The anticipated September 16-17 Fed meeting is seen as a potential turning point, with an 89-91% chance the Fed will lower rates by 25 basis points.
Inflation remains a concern, but moderating, and the job market has cooled, supporting the Fed's case for rate cuts. Forecasts from reputable sources predict mortgage rates to remain high in 2025, dipping below 6% only in Q3 2026.
Mortgage Payment Example:
A $300,000 30-year fixed mortgage loan at 6.71% would have a monthly payment of about $1,942. If the Fed cuts interest rates next month, bringing the rate down to around 6.4%, the monthly payment would drop to about $1,892.
ARM (Adjustable-Rate Mortgage) trends show ARM rates remaining higher than fixed rates, reflecting market uncertainty. The looming Fed decision and its impact on mortgage rates will be closely watched by investors, buyers, and policymakers alike.
Summary of Mortgage and Refinance Rates on August 20, 2025:
Category
Rate
Weekly Change
30-Year Fixed Mortgage
6.71%
+0.04%
15-Year Fixed Mortgage
5.80%
+0.03%
5-Year ARM Mortgage
7.32%
+0.08%
30-Year Fixed Refinance
6.94%
+0.03%
15-Year Fixed Refinance
5.79%
+0.04%
With mortgage rates expected to remain high in 2025, it's essential to focus on strategic real estate investments that offer stability and passive income.
