Mortgage rates are looking almost suspiciously low, but don’t worry — we can tell you what’s up.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 5.88% APR, according to rates provided to NerdWallet by Zillow. This is 13 basis points lower than yesterday and seven basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
Right now, there’s a lot of will-they-or-won’t-they tension with the Federal Reserve, which has its final meeting of 2025 next week. Usually when we’re this close to a meeting, markets have fully made up their minds about whether the Fed will raise, lower or maintain the federal funds rate. But this time around, there’s a lot more uncertainty than normal — more on that below the graph.
That intrigue means that mortgage lenders, like the rest of us, are trying to figure out where things stand, and we’re seeing less agreement than usual. Bear in mind that we’re looking at an average rate for a strong candidate, but that’s also what most lenders will show you when you’re looking at sample rates. Entering your personal info is going to give you a better sense of what kind of rate you might actually be offered.
Average mortgage rates, last 30 days
📉 When will mortgage rates drop?
Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.
Thanks to this fall’s government shutdown disrupting federal agencies’ data collection, the central bankers are working with considerably less information than usual. That makes their next move less clear to them and to everyone watching them. On top of that, individual Fed governors haven’t been in sync lately, with some calling for a cut and others espousing caution in public remarks.
So now all eyes are on this week’s biggest data drop: On Friday, Dec. 5, the Department of Commerce will release inflation data for September. That’s right, inflation numbers from three months ago. That report includes the latest personal consumption expenditures price index, or PCE, which is the Fed’s preferred gauge of inflation.
Even though the information is more outdated than skinny jeans, the September PCE could exert a strong influence on the Fed’s decision when it meets next week. The bankers could hesitate to cut short-term rates if the report shows strong inflation. But if it’s not too bad, a rate cut could be coming. Having a clearer picture of the Fed’s next move will likely firm up market expectations and give mortgage rates a more definite direction.
🔁 Should I refinance?
Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).
With rates where they are right now, you could start considering a refi if your current rate is around 6.38% or higher.
Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.
If you’re looking for a lower rate, use NerdWallet’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.
🏡 Should I start shopping for a home?
There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.
If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.
NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.
🔒 Should I lock my rate?
If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.
Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.
🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.
🧐 Why is the rate I saw online different from the quote I got?
The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.
In addition to market factors outside of your control, your customized quote depends on your:
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Location and property type
Even two people with similar credit scores might get different rates, depending on their overall financial profiles.
👀 If I apply now, can I get the rate I saw today?
Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.
