Mortgage Rates Ride High Despite Positive Inflation Reading: Today's Rates on June 12, 2025
Despite forecasts of gradually falling mortgage rates, the housing market remains largely unaffordable for most prospective buyers. The average 30-year fixed rate has remained close to 7% for the last seven months, leading to cost-prohibitive monthly payments.
The average for a 30-year fixed mortgage is 6.91% today, up 0.00% compared to one week ago. The average rate for a 15-year fixed mortgage is 6.10%, which is an increase of 0.02% since last week.
Further compounding the financial pressure on borrowers are high home prices and the skyrocketing cost of ownership due insurance and property taxes. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities.
Meanwhile, the "lock-in" effect, where current homeowners with low-rate mortgages are reluctant to sell and take on higher interest rates, has kept housing inventory tight and fueled price competition in high-demand areas.
Should an economic slowdown force the Federal Reserve to lower interest rates later this year, it's unlikely to bring significant relief to homebuyers in today's overheated market. Even the possibility of a job-loss recession is already pushing many households to tighten their budgets and take on less financial risk.
When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders.
About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates.
What's going on with mortgage rates right now?
The last few months have seen mortgage rates navigate a bumpy course. Persistent inflation, the looming threat of a global trade war and escalating recession fears have all contributed to an uncertain economic outlook.
As a result, the Fed has adopted a wait-and-see approach when it comes to interest rate adjustments. After cutting borrowing costs three times last year, the central bank is keeping borrowing costs at their current range so far in 2025. Experts predict the Fed will hold rates steady again at its upcoming meeting on June 17-18.
If President Trump eases some of his aggressive tariff measures or if the labor market deteriorates, it could prompt the Fed to resume easing interest rates in the fall, which would put downward pressure on bond yields and mortgage rates.
Still, experts warn of a lot more volatility in the market. As a result, buyers are being more patient and strategic about financing, comparing different loan types and planning ahead.
"Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board.
For a look at mortgage rate movement in recent years, see the chart below.
Where are mortgage rates headed?
Despite hopes that 2025 would bring relief to the housing market, concerns over a potential recession and uncertain trade policies have kept longer-term bond yields and mortgage rates high.
Mortgage rates primarily take their cues from the 10-year Treasury yield, which reflects investors' collective expectations regarding inflation, labor market health, upcoming monetary policy shifts and the impact of global factors like tariffs. If investors anticipate persistently high inflation or significant government borrowing, they'll demand higher returns on their bonds, which in turn keeps mortgage rates elevated.
"Rates could fall if inflation keeps cooling and the labor market softens," said Smith. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates."
In short, it will be difficult for mortgage rates to drop below 6% without the risk of a job-loss recession. Fannie Mae now expects rates around 6.1% by the end of 2025 and 5.8% by the end of 2026. According to Smith, mortgage rates could move lower slowly and steadily, but numerous risks could keep rates elevated.
How can I choose a mortgage term?
Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 6.91% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment.
15-year fixed-rate mortgages
Today, the average rate for a 15-year, fixed mortgage is 6.10%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 6.16% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.
Calculate your monthly mortgage payment
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments.
What are some tips for finding the best mortgage rates?
Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.
Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
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