Five-year adjustable rate mortgages dropped by 0.06 percentage points on August 19, 2025.

The world of mortgages and finances is abuzz with anticipation as the Federal Reserve (Fed) gears up for potential rate cuts in the coming months. Here's a breakdown of what you need to know.

In mid-2025, mortgage rates on 30-year fixed mortgages have remained close to 6.8%. However, this could change as the Fed considers a second rate cut in December 2025, following its earlier move in December 2024, when it lowered the key interest rate in response to weakened economic growth and uncertainties about the economic outlook.

The Fed's own projections from June suggested two rate cuts in 2025. If these predictions hold true, a rate cut expected in September 2025 could potentially bring mortgage rates down near 6% by the end of the year. This could be good news for current mortgage buyers, who should keep a close eye on the September meeting for potential relief.

The bond markets are particularly sensitive to the Fed's actions and statements. If a rate cut is confirmed, bond yields are likely to go down, which could lead to lower mortgage rates.

For those considering refinancing, it's worth noting that refinancers with rates above 7% should pay close attention to what happens in September for potential refinancing at a lower rate.

The Fed anticipates a slow lowering of rates, with the goal of getting them to around 2.25%-2.5% by 2027. This longer-term outlook can help mortgage-seekers and refinancers make smarter decisions about their financial future.

In conclusion, the Fed's rate cuts could have a significant impact on mortgage rates and refinancing opportunities. Stay informed, keep an eye on the September 16-17 Meeting, and make decisions that best suit your financial needs.

Five-year adjustable rate mortgages dropped by 0.06 percentage points on August 19, 2025.