Over the last five weeks, mortgage rates have fallen to under 6.5%, opening more opportunities for hopeful home buyers. Mortgage applications for home purchases have been on the rise while pending home sales have also increased—indicating that more home buyers are responding to the lower rates.
A new study from LendingTree shows that recent rate drops over the past year could save potential buyers around $40,000 over the life of a 30-year loan.
The 30-year fixed-rate mortgage fell to 6.30% this week, Freddie Mac reports. “This has provided savvy buyers a sweet spot to reexamine the home search process with more inventory, widening their choices,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®.
Over the past few weeks, mortgage rates have settled at their lowest level in about a year, adds Sam Khater, Freddie Mac’s chief economist. “There is growing evidence that home buyers are digesting these lower rates and gradually are willing to move forward with buying a home, which is boosting purchase activity,” he says.
Mortgage applications—a gauge of future buying activity—have been averaging double-digit annual increases in recent weeks, up 14% compared to a year ago, according to the Mortgage Bankers Association. Meanwhile, the number of buyers signing contracts for a home purchase climbed 4% in August and was up 3.8% compared to a year ago, according to NAR data.
Every Little Bit Counts
Between July 2024 and July 2025, the 30-year fixed-rate mortgage dropped by 0.51 percentage points, with the average APR falling from 7.19% to 6.68%. This decline translates into potential savings of about $40,000 over the life of a 30-year loan, according to a newly released LendingTree study. The average monthly mortgage payment dropped by about $112, adding up to about $1,340 in savings a year for those who research among multiple lenders, the study notes.
The study also analyzed state-level savings. Home buyers in places like Washington, D.C., Massachusetts and California are seeing the largest monthly mortgage payment drops—around $210 on average—totaling about $76,000 in savings over 30 years.
“You have much more power over mortgage rates than you think you do,” says Matt Schulz, LendingTree’s chief consumer finance analyst. “You can shop around for the best rates. You can pay points to bring down your APR. You can consider a 15-year mortgage instead of a 30-year mortgage. Just make sure that you do your homework so you know what you’re getting into before you act.”
Mortgage Rates This Week
At this week’s 6.30% average for the 30-year fixed-rate mortgage, borrowers with a 20% down payment would pay $1,981 monthly for a $400,000 home, Lautz says. With a 10% down payment, the monthly payment would be $2,228.
Here’s a closer look at how mortgage rates fared for the week ending Oct. 9:
- 30-year fixed-rate mortgages: averaged 6.30% this week, dropping from last week’s 6.34% average. A year ago, 30-year rates averaged 6.32%.
- 15-year fixed-rate mortgages: averaged 5.53%, dropping from last week’s 5.55% average. Last year at this time, 15-year rates averaged 5.41%.
