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*Mortgage Update – Oct 4 2025**
*30‑year fixed rate fell to 6.22 % (‑0.37 pp from 6.59 % last week).
*15‑year fixed rate dropped to 5.56 % (‑0.09 pp).
*5‑year ARM stayed at 7.10 %.
*30‑year refinance climbed to 7.13 % (+0.15 pp).
*15‑year refinance rose to 6.10 % (+0.30 pp).
*5‑year ARM refinance increased to 7.41 % (+0.02 pp).
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### Current Rates Snapshot – Oct 4 2025
| Loan Type | Current Rate | Weekly Change | APR | APR Change |
|-----------|--------------|---------------|-----|------------|
| 30‑yr Fixed | 6.22 % | –0.37 % | 6.75 % | –0.31 % |
| 20‑yr Fixed | 6.34 % | –0.02 % | 6.46 % | –0.18 % |
| 15‑yr Fixed | 5.56 % | –0.09 % | 5.92 % | –0.15 % |
| 10‑yr Fixed | 5.84 % | 0.00 % | 6.23 % | 0.00 % |
| 7‑yr ARM | 7.27 % | –0.01 % | 7.44 % | –0.29 % |
| 5‑yr ARM | 7.10 % | –0.04 % | 7.72 % | –0.08 % |
**Government‑Backed Loans**
| Loan Type | Rate | Weekly Change | APR | APR Change |
|-----------|------|---------------|-----|------------|
| 30‑yr FHA | 7.63 % | +1.82 % | 8.68 % | +1.87 % |
| 30‑yr VA | 5.89 % | –0.18 % | 6.02 % | –0.20 % |
| 15‑yr FHA | 5.31 % | –0.01 % | 6.27 % | –0.01 % |
| 15‑yr VA | 5.69 % | –0.17 % | 6.05 % | –0.08 % |
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### Refinancing Landscape
| Loan Type | Rate | Weekly Change |
|-----------|------|---------------|
| 30‑yr Fixed Refinance | 7.13 % | +0.15 % |
| 15‑yr Fixed Refinance | 6.10 % | +0.30 % |
| 5‑yr ARM Refinance | 7.41 % | +0.02 % |
Higher refinance rates suggest that homeowners seeking to lower payments or shorten terms face steeper costs than new buyers.
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### Why Rates Diverge
The Federal Reserve’s September 17 cut of 0.25 % to a 4.0 %–4.25 % range lowered borrowing costs for new mortgages. Treasury yields slipped to 4.12 % by Oct 1, easing pressure on mortgage pricing. However, the spread between mortgage rates and Treasury yields widened beyond the usual 1–2 pp, reflecting lender risk premiums that have not fully eased. Refinancing, involving different borrower risk profiles and market conditions, carries a higher spread, keeping those rates elevated.
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### Forecasts
| Source | 2025 Avg. | 2026 Avg. |
|--------|-----------|-----------|
| NAR | 6.4 % | 6.1 % |
| Fannie Mae | 6.4 % | 5.9 % |
| Mortgage Bankers Association | 6.7 % | 6.5 % |
Experts anticipate a gradual easing into 2026, but volatility and wide spreads may keep borrowing costs higher than the decade‑low levels.
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### Monthly Payment Impact (30‑yr Fixed, $300,000)
| Rate | Monthly P&I | Total 30‑yr Interest |
|------|-------------|----------------------|
| 6.59 % | $1,912.00 | $388,512 |
| 6.22 % | $1,835.00 | $360,600 |
A 0.37 pp drop saves roughly $77 per month and $27,912 in interest over 30 years.
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### Key Takeaways
* New‑home buyers enjoy a notable 30‑yr fixed rate drop to 6.22 %.
* Refinancing costs have risen, with 30‑yr rates at 7.13 %.
* Fed’s rate cut and falling Treasury yields drive lower mortgage rates, but widened spreads limit deeper declines.
* Forecasts project mid‑6 % rates through 2025, potentially dipping below 6 % in 2026.
* Buyers should act quickly to lock in lower rates; refinancers may face higher costs.
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### Bottom Line
October 4 2025 presents a mixed picture: fresh mortgages benefit from a sharp rate decline, while refinance options become pricier. The Fed’s easing stance and Treasury yield movements support lower rates, yet risk premiums keep spreads wide. Prospective buyers should compare rates promptly, whereas homeowners considering refinancing should weigh the higher costs against potential savings.
