Mortgage Rates Update (September 2025): What Homebuyers and Homeowners Need to Know

Mortgage Rates Update (September 2025): What Homebuyers and Homeowners Need to Know

Mortgage rates have been on a rollercoaster ride throughout 2025. After months of steady declines, rates on fixed deals are showing signs of leveling off. In fact, experts are warning that the cuts we’ve seen in recent months could slow down—or even reverse—if inflation remains stubbornly high.

                    

The July inflation report was hotter than expected, and that has fueled speculation that central banks may need to keep interest rates higher for longer. For homebuyers and homeowners, this means that while there are still opportunities to lock in attractive mortgage deals, the window could be closing quickly.

This article breaks down the latest mortgage rates, explains what’s driving the market, compares deals across lenders, and provides practical tips to help you make the smartest decision—whether you’re buying your first home or refinancing an existing loan.

Current Mortgage Rates (as of September 6, 2025)

Today’s national averages paint a mixed picture:

• 30-year fixed mortgage: 6.49% (unchanged from yesterday)
• 30-year fixed refinance: 6.67%
• 15-year fixed refinance: 5.95%
• 5/1 ARM (adjustable-rate mortgage): trending upward

According to Bankrate, borrowers who shop around can often find deals significantly better than the national average. For example:

On July 27, 2025, the national average for a 30-year fixed mortgage was 6.78%.

On the same date, top offers on Bankrate were just 5.91%.

That’s a difference of 0.87 percentage points, which on a $340,000 mortgage could save you roughly $2,648 per year.

Even today, for the week of August 31st, Bankrate’s top offers are still 1.01% lower than the national average.

👉 Key takeaway: Always compare multiple lenders. Even a seemingly small rate difference can translate into thousands of dollars in savings over the life of your loan.

Why Rates Could Rise Again

Mortgage rates are heavily influenced by the broader economy. Over the past year, declining inflation and signs of slowing economic growth have put downward pressure on borrowing costs. But July’s inflation figures were higher than expected, raising concerns that central banks may not be done with tight monetary policy.

If interest rates remain higher for longer, mortgage rates could:

Stabilize at current levels, staying in the mid-6% range for 30-year loans.

Creep upward, especially if inflation stays sticky or economic growth accelerates.

Remain volatile, moving up and down week by week depending on economic data releases.

For potential borrowers, the message is clear: if you see an attractive rate, consider locking it in before market conditions change.

Best Fixed Mortgage Deals Right Now

Mortgage shoppers in New Zealand are seeing some of the lowest rates available among major banks. As of Sunday, September 7, 2025:

6-month fixed: 4.99% (lowest, offered by ANZ and BNZ)

1-year fixed: 4.75% (same at all major banks)

2-year fixed: 4.75% (offered by ANZ, ASB, BNZ, TSB, and Westpac)

For comparison, U.S. borrowers are facing averages closer to 6.49% for 30-year fixed mortgages. The difference highlights how regional economies, inflation, and central bank policies can significantly influence borrowing costs.

How Lenders View Borrowers Differently

When it comes to getting approved for a mortgage, it’s not just about the rate—it’s also about how lenders evaluate you as a borrower. Different lenders have different standards:

FHA Lenders : These are often more flexible. Many will approve borrowers with credit scores as low as 580–620, provided other financial factors (like income stability) check out.

Conventional lenders: Banks that serve prime or super-prime borrowers often expect higher credit scores (700+), strong employment history, and low debt-to-income ratios.

Specialized lenders: Some may focus on first-time buyers, self-employed individuals, or those with unique financial situations.

👉 Pro tip: If your credit score is on the lower side, don’t assume homeownership is out of reach. Shop around for lenders that specialize in borrowers like you.

Refinancing in 2025: Is It Worth It?

Refinancing can be a powerful financial move—if done correctly. With today’s 15-year refinance average at 5.95%, many homeowners who originally locked in at rates above 7% in late 2022 or early 2023 could see substantial savings.

However, refinancing isn’t free. You’ll need to factor in:

Closing costs (which can range from 2% to 5% of the loan amount).

Application and appraisal fees.

The break-even point (how long it takes for your savings to outweigh the costs).

For example, if refinancing saves you $250 per month but costs $6,000 in fees, your break-even point is 24 months. If you don’t plan to stay in your home for at least two more years, refinancing might not be worth it.

Step-by-Step Guide: How to Get the Best Mortgage Rate

1. Check your credit score – The higher your score, the better your chances of securing a low rate.

2. Reduce existing debt – Lenders look closely at your debt-to-income ratio. Paying down credit cards can help.

3. Compare multiple lenders – Use tools like Bankrate or consult mortgage brokers who can bring you several options at once.

4. Consider different loan terms – A 15-year fixed loan often comes with a significantly lower rate than a 30-year fixed, though monthly payments are higher.

5. Lock in your rate – If you find a rate you’re comfortable with, don’t wait too long. Market conditions can change overnight.

The Role of Inflation and the Federal Reserve

Mortgage rates are closely tied to inflation and the actions of the Federal Reserve . When inflation rises, the Fed often raises interest rates to cool down the economy. This makes borrowing more expensive.

That’s exactly what we saw in July: higher-than-expected inflation caused markets to worry that the Fed may keep its policy rates elevated, preventing mortgage rates from falling further.

Until inflation shows consistent progress toward the Fed’s 2% target, borrowers should expect some volatility in mortgage pricing.

What This Means for Homebuyers in 2025

First-time buyers: While rates remain relatively high compared to the ultra-low levels of 2020–2021, there are still opportunities to secure good deals. Consider FHA or shorter-term fixed loans.

Move-up buyers: If you’re selling a home with a low locked-in rate, moving may feel painful. But weigh the benefits of more space or better location against the slightly higher financing costs.

Investors: Rental property buyers should run the numbers carefully. With rates above 6%, cash flow may be tighter unless you can secure below-market financing.

Conclusion: Should You Act Now or Wait?

Mortgage rates in September 2025 are at a crossroads. On one hand, many lenders—especially through platforms like Bankrate—are offering deals well below the national average, giving borrowers a chance to save thousands. On the other hand, inflation and central bank policies could push rates higher in the coming months.

If you’re in the market for a mortgage or considering refinancing, the best approach is to:

Shop around aggressively.

Understand your break-even point if refinancing.

Lock in a deal when you find a rate that works for your budget.

With the right strategy, you can navigate this uncertain market and secure a mortgage that supports your financial goals.

FAQs: Mortgage Rates September 2025

1. Are mortgage rates going up or down?

Rates have been trending downward but may rise again due to stubborn inflation. Experts warn that the decline could stall.

2. What is the average mortgage rate today?

As of September 6, 2025, the average 30-year fixed mortgage rate is 6.49%.

3. What are the lowest fixed rates available?

In New Zealand, ANZ and BNZ are offering 6-month fixed rates at 4.99%. Several banks are offering 1-year and 2-year fixed deals at 4.75%.

4. Should I refinance my mortgage in 2025?

Refinancing may save you money if you can reduce your rate by 0.5% or more. Always calculate the break-even point before deciding.

5. How can I qualify for a better rate?

Boost your credit score, lower your debt-to-income ratio, and compare multiple lenders to improve your chances of securing a favorable deal.