Average Mortgage Interest Rates by Loan Purpose 2024-2025 YTD Agency Loans

This bar chart illustrates average interest rates for agency loans segmented by purpose—cash-out refinance, purchase, and rate and term refinance—comparing full-year 2024 data against 2025 year-to-date through November.

R/T refinances show the lowest rates (6.09% in 2024 rising slightly to 6.14% in 2025).

Purchase loans, at 6.52% in 2024 dipped slightly to 6.44% in 2025.

Cash-out refinances have the highest rates (6.59% to 6.60%), incorporating risk premiums for liquidity access.

Strategically, the modest decline in purchase rates is a result of the easing monetary conditions, and boosts homebuyer activity in a softening rate environment. Lenders could leverage this by targeting first-time buyers with tailored products to capture volume growth.

Conversely, the uptick in refinance rates may deter rate-sensitive borrowers, shifting emphasis to retention strategies like streamlined refi programs.

For stakeholders like servicers, higher cash-out rates imply elevated prepayment risks in portfolios.

Decision makers can use this data to refine pricing models, assess market share opportunities, and advise clients on timing—e.g., encouraging purchases now while rates trend lower, or exploring alternatives like HELOCs for cash needs to avoid premium costs.