Housing News

Ending the Year with a Bang: Mortgage Rates Fall to Lowest Point of 2025

The lowest mortgage interest rates of 2025 slid in under the end-of-year deadline, providing homebuyers and homeowners with some last-minute financial relief.

Mortgage rates hit their lowest level in 14 months, averaging 6.15% for 30-year, fixed-rate loans in the week ending Dec. 31, according to Freddie Mac. The figure was down a little from 6.18% in the previous week.

The last rate of the holiday season, however, was a big drop from this time last year when mortgage rates averaged 6.91%. And it was a significant decrease from when rates peaked in 2025 at 7.04% in the second week of January.

“After starting the year close to 7%, the average 30-year fixed-rate mortgage moved to its lowest level in 2025 this week,” said Freddie Mac Chief Economist Sam Khater in a statement. “[That’s] an encouraging sign for potential homebuyers heading into the new year.”

The difference between a 7.04% and 6.15% could save homebuyers, as well as homeowners who refinance their existing loans, roughly $195 a month on a median-priced home. The math adds up quickly, saving homeowners nearly $2,350 a year and roughly $70,000 over the life of a 30-year loan.

The calculation assumes buyers put down 20% on a $415,000 home, the median list price in November, according to the most recent Realtor.com data.

Lower mortgage rates is good news for buyers and sellers, boosting a buyer’s purchasing power or put homeownership within reach. Existing homeowners may be able to refinance their loans to lock in lower payments.

The year also ends with a slowdown in home price growth. Nationally, the median list price dipped 0.4% in November, according to Realtor.com.

“Rates have retreated in a meaningful way during the second half of the year and are on track to make 2026 a year of rebound for the housing market,” wrote Realtor.com Senior Economist Joel Berner in a post on the listing portal. “If this momentum continues into the peak buying season of 2026, we could see much stronger sales figures than we saw for much of 2025.”