What is the current mortgage rate for most homeowners?

The majority of current U.S. mortgage holders have a rate under 4%.  

Currently, 51.5% of borrowers with a 30-year mortgages have a rate of 4% or lower, while 19.9% have a rate above a 6%. 27.3% of borrowers have a rate between the two, 4.1% to 6%. Homeowners with low rates are the beneficiaries of good timing and staying up to date on mortgage rates. 

Staying on top of current mortgage rates allows borrowers to take advantage of mortgage rates when they drop, either through getting a first mortgage, refinancing or tapping into their home equity. 

If rates are dropping lower than your current mortgage, it might be a good time to consider refinancing or tapping into your home equity.  

Refinancing will change the terms of your loan, so your interest rate will reflect where they currently are. Tapping into your home equity will give you funds based on your home’s current value and your remaining mortgage balance. 

One popular option homeowners can use to tap into their home equity is through a home equity line of credit, or HELOC.  

HELOCs offer borrowers access to funds for a set number of years while requiring only interest payments on the amount you borrowed. When that time is up, you will have to repay your loan amount and interest. Getting a HELOC when rates are lower means that you could borrow money with smaller interest payments. 

Start your HELOC or refinance with an online application through a trusted lender today! 

The best thing homeowners with high mortgage rates can do is keep an eye on current mortgage rates. Watch for rates to drop lower than your current mortgage rate or to your desired percentage. When this happens, you can refinance your mortgage to match current rates. 

While you wait for mortgage rates to drop, try to pay down any debts you have. This could lower your debt-to-income ratio (DTI) and improve your credit score, two metrics that might also help you get a lower mortgage rate when you refinance. 

Refinancing your mortgage will change the terms of your loan, including mortgage interest rates. One reason many borrowers choose to refinance their mortgage is to lower their monthly payments*. 

If your financial situation has improved or rates have dropped, a mortgage refinance could reduce the amount of interest paid monthly. A refinance could also change the length of your loan. Extending the length of your loan will reduce your principal paid monthly, while shortening your loan length might increase your monthly payments but pay off your mortgage sooner. 

A cash-out refinance** will offer you a larger loan amount and access to funds you can use for any expenses you may have. 

Mortgage refinancing comes with closing costs you will have to pay when finalizing your loan refinance. 

The amount a homeowner would be able to save if mortgage rates drop depends on how far they fall.  

A drop of 15 basis points, which refers to a drop in the numbers after the decimal, on a 30-year fixed-rate mortgage at 6% for $414,900 (which is what the NAR claims is the national median price for single family existing homes in 2025) with a 20% down payment could save a homeowner $32 a month. While this might not seem like a lot, it works out to $384 a year or $11,520 over the life of your loan. 

Of course, a larger drop would mean larger savings. In the past six months, rates on a 30-year mortgage have dropped over 50 basis points. This led to mortgage interest rates hitting  a 3-year low. 

Yes, you can still tap into your home equity when rates drop.  

When rates are dropping is actually one of the best times to borrow against your home’s equity because it means you could pay less in interest on your loan. As rates drop, the number of borrowers who choose to refinance or tap into their home equity tends to increase. 

One way borrowers choose to tap into their home equity without changing the terms of their loan is through a HELOC. 

HELOCs typically offer borrowers access to a line of credit based on their home’s current value minus their remaining mortgage. 

HELOCs are separated into two periods.  

The first HELOC period is when borrowers can access their line of credit while only paying interest on the amount they use. After that, there is a repayment period where you no longer have access to funds and will have to pay back both loan principal and interest. 

When rates drop, the interest you pay on your HELOC could be lower. 

If rates drop, you don’t want to have to wait for an appointment to start your HELOC or refinance. You can apply for a HELOC or refinance any time with an online application through a trusted lender. 

Online applications through Rate can be completed in as little as five minutes and, with a HELOC, could get you access to your funds as soon as five days after completion. Your online applications will connect you with a professional Loan Officer who is available to help you or answer any questions you may have during your application. 

When the time is right, take advantage of lower mortgage rates by starting a refinance or HELOC application. 

_{*Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Rate for current rates. Restrictions apply.}

_{** Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Rate for more information.}

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.}