Mortgage rates As of June 5, 2025, mortgage interest rates in the U.S. have experienced a slight decline, offering a potential window of opportunity for prospective homebuyers and those considering refinancing. This article provides a comprehensive overview of the current mortgage landscape, including average rates, comparisons between fixed and adjustable-rate mortgages, VA loan specifics, and the broader economic factors influencing these trends.
Current Mortgage Rates Snapshot
Beautiful high end house located on Barefoot Beach Road at Bonita Springs in Florida.© Photo by: John Greim/Loop Images/Universal Images Group via Getty Images
According to recent data from Zillow, the national average mortgage rates as of June 4, 2025, are as follows:
- 30-year fixed: 6.79%
- 20-year fixed: 6.46%
- 15-year fixed: 5.94%
- 5/1 ARM: 6.82%
- 7/1 ARM: 6.84%
- 30-year VA: 6.35%
- 15-year VA: 5.80%
- 5/1 VA: 6.40%
These figures represent a modest decrease from previous weeks, with the 30-year fixed rate dropping by two basis points. The 15-year fixed mortgage rate has notably dipped below 6%, making it an attractive option for borrowers seeking shorter loan terms.
Refinance Rates Overview
Refinancing rates have also seen slight reductions:
- 30-year fixed refinance: 6.83%
- 20-year fixed refinance: 6.66%
- 15-year fixed refinance: 6.01%
- 5/1 ARM refinance: 7.15%
- 7/1 ARM refinance: 6.73%
These rates suggest that homeowners considering refinancing may benefit from current market conditions, particularly if they can secure a lower rate than their existing mortgage.
Fixed vs. Adjustable-Rate Mortgages (ARMs)
Fixed-Rate Mortgages:
- Pros: Predictable monthly payments, protection against interest rate increases.
- Cons: Typically higher initial interest rates compared to ARMs.
Adjustable-Rate Mortgages (ARMs):
- Pros: Lower initial interest rates, potential savings if interest rates remain stable or decline.
- Cons: Interest rates can increase over time, leading to higher monthly payments.
Given the current economic climate, borrowers should carefully assess their financial situation and future plans when choosing between fixed and adjustable-rate mortgages.
VA Loan Rates
For eligible veterans and active-duty service members, VA loan rates are as follows:
- 30-year fixed VA: 6.125%
- 15-year fixed VA: 5.80%
- 5/1 ARM VA: 6.40%
These rates offer competitive options for those who qualify, with the added benefits of no required down payment and no private mortgage insurance (PMI).
Economic Factors Influencing Mortgage Rates
Several macroeconomic elements are impacting mortgage rates:
- Bond Yields: A recent decline in the 10-year U.S. Treasury yield, dropping to 4.364%, has influenced mortgage rates downward.
- Employment Data: The ADP National Employment Report indicated only 37,000 private-sector jobs were created in May, signaling potential economic slowing.
- Federal Reserve Policies: Speculation about future rate cuts by the Federal Reserve could further impact mortgage rates in the coming months.
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Mortgage Rate Forecast
Looking ahead, forecasts suggest that mortgage rates may continue to experience modest declines:
- Fannie Mae and Mortgage Bankers Association: Predict rates could dip to between 5.5% and 6.2% by late 2025 or 2026.
However, these projections are contingent on various factors, including inflation trends, Federal Reserve decisions, and overall economic performance.
Conclusion
The current mortgage landscape presents a mixed bag for borrowers. While rates have decreased slightly, they remain relatively high compared to historical lows. Borrowers should carefully evaluate their financial situations, consider the pros and cons of different mortgage types, and stay informed about economic indicators that could influence future rate movements.
