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📉 Mortgage Rates Tick Down Slightly Over Memorial Day Weekend – May 26, 2025

Mortgage rates eased a bit to kick off the Memorial Day weekend, giving potential buyers and homeowners a small but welcome reprieve. According to the latest data, the average 30-year fixed mortgage rate dipped three basis points to 6.89%, while the 15-year fixed rate inched up to 6.11%.

These mild fluctuations come as the bond market takes a pause for the holiday, but all eyes will be on its reopening later this week. With growing concerns over U.S. national debt and trade-related tariffs, the next round of bond activity could bring new volatility to mortgage pricing.

Related: The Top 10 Most and Least Affordable Housing Markets in the US in 2025

📊 Today’s Average Mortgage Rates – May 26, 2025

Here’s a snapshot of current national averages based on Zillow data:

Loan Type	Rate (%)
30-Year Fixed	6.89%
20-Year Fixed	6.62%
15-Year Fixed	6.11%
5/1 ARM	6.89%
7/1 ARM	7.16%
30-Year VA	6.50%
15-Year VA	5.94%
5/1 VA ARM	6.43%

These rates represent national averages and can vary by lender, location, borrower profile and specific loan dynamics including the purchase price and deposit amount.

Related: Growing Housing Affordability Gap Creating Golden Opportunity for Investors

🔁 Refinance Rates: A Bit Higher Across the Board

Refinance rates continue to hover slightly above purchase rates:

Refinance Loan Type	Rate (%)
30-Year Fixed	6.91%
20-Year Fixed	6.60%
15-Year Fixed	6.12%
5/1 ARM	7.36%
7/1 ARM	7.52%
30-Year VA	6.46%
15-Year VA	6.00%
5/1 VA ARM	6.40%

Refinancing still makes sense for some homeowners – particularly those looking to access equity or lock in a shorter term—but higher refi rates and closing costs can limit the upside.

🌍 US Mortgage Rates for Foreigners

For foreigners looking to buy investment properties in the US, the most flexible option is typically a DSCR Loan.

These types of loans tend to make sense for foreigners as lenders underwrite the property more than the borrower. That means you can get a mortgage for an investment property in the US as a foreigner without having to provide proof of income, US credit, or tax returns.

Current rates for DSCR loans vary from 6.76% to 8% depending on the lender and the specific terms of the deal.

Lenders will loan up to 75% of the purchase price, and interest rates are usually fixed for 30 years. Borrowers can also often use a rate buydown – paying some extra interest upfront, known as points – to get a better interest rate.

Related: The Best USA Mortgages for Foreign Nationals in 2025

💡 A Closer Look at Loan Types

🏠 30-Year Fixed Mortgages

Still the go-to for most buyers, the 30-year fixed remains attractive due to its predictability. At today’s rate of 6.89%, a $300,000 loan would carry a monthly principal and interest payment of around $1,974, with total interest over the life of the loan topping $410,000.

📉 15-Year Fixed Mortgages

Offering a lower interest rate and much faster equity buildup, the 15-year option is popular with buyers who can handle the higher monthly payments. At 6.11%, a $300,000 mortgage would cost about $2,549 per month, with total interest closer to $159,000—a significant savings over the 30-year term.

🔄 Adjustable-Rate Mortgages (ARMs)

ARMs offer lower initial rates (6.89% for a 5/1 ARM today), but that flexibility comes with risk. After the fixed term expires, the rate adjusts annually. For buyers who plan to sell or refinance before the adjustment period, ARMs can offer short-term affordability—but long-term unpredictability.

🏠 DSCR Loan

DSCR (debt service coverage ratio) loans are typically used by real estate investors to purchase or refinance rental properties. Rather than assessing a borrowers income, DSCR lenders look at the net operating income generated by the rental property as a means of making payments on the mortgage. Typically they want to see a DSCR of 1.25 or more. So a rental property must generate net operating income of $1,250 in order to a qualify for a DSCR loan with a monthly repayment of $1,000.

Related: 10-Year US Interest Rate Forecast from the Experts

🧠 What’s Driving Today’s Rates?

Several key factors are contributing to the current movement in mortgage rates:

📉 Bond Market Closure

With the bond market closed for Memorial Day, rate movements have been relatively minor. The return to trading later this week could see more significant changes based on investor reaction to economic headlines.

💰 Rising Debt & Tariffs

Concerns about the ballooning U.S. deficit and tariff-related inflation are pushing bond yields—and mortgage rates—upward. Investors are demanding higher yields to offset growing fiscal risks, which in turn raises borrowing costs.

📉 Inflation & the Fed

The Federal Reserve’s interest rate policy remains a central driver of mortgage rates. If inflation shows signs of acceleration, the Fed may resume rate hikes – keeping mortgage rates elevated. If the economy slows, rate cuts could follow.

Related: Dave Ramseys Predictions for US Mortgage Rates in 2025

🔮 What’s Next for Mortgage Rates?

Analysts remain divided on where rates are headed for the rest of 2025. While some forecast gradual easing as inflation stabilizes, others point to continued upward pressure from fiscal policy and international trade uncertainty.

If the economy slows or the Fed shifts to a more accommodative stance, we could see rates trend lower. But for now, a sideways-to-slightly-down trajectory seems most likely—barring any major surprises.

Related: Unlocking Value in the US Housing Market

❓ Mortgage Rate FAQs – May 26, 2025

🟠 Are current rates high?
Rates near 6.89% are elevated compared to the sub-3% environment of 2020–2021, but more in line with long-term historical averages.

🟠 Will rates drop significantly this year?
A major decline seems unlikely in the short term, but modest reductions are possible if inflation eases and the Fed shifts course.

🟠 Is now a good time to refinance?
It depends. If your current rate is above 7.5% or you’re seeking a shorter term, refinancing could make sense. Otherwise, it’s worth watching rates before jumping in.

🟠 What affects mortgage rates the most?
Mortgage rates are tied to the 10-year Treasury yield, Fed policy, inflation trends, and investor sentiment. Economic data and fiscal policy developments play a major role too.

Related: The Market Advantage for Foreign Property Investors in the USA

🧭 Final Thoughts

Today’s slight drop in mortgage rates might seem minor, but it reflects a market in flux. With inflation, government debt, and global trade policies all influencing bond yields, rate volatility is likely to continue in the coming months.

For buyers, the dip could offer a small window of opportunity—especially in a still-competitive housing market. For homeowners considering refinancing, it’s all about doing the math.

As always, stay informed, talk to your lender, and assess your personal financial picture before locking in a rate.

FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate