With today’s high prices and tight inventory, buying a home is more challenging than ever. But are least one thing is looking up: mortgage rates are falling.
A new LendingTree analysis shows that the average APR for 30-year, fixed-rate mortgages across the U.S. dropped by 0.51 percentage points between July 2024 and July 2025. That brings the average APR down to 6.68% from 7.19% a year earlier. That could save borrowers around $40,000 over the life of a loan.
Key findings from the report:
- 30-year, fixed-rate mortgage APRs decreased by an average of 0.51 percentage points across the U.S. between July 2024 and July 2025. In July 2025, the average APR was 6.68%, down from 7.19% in July 2024.
- Across the U.S., falling APRs caused calculated mortgage payments to decrease by an average of $111.71 a month. That amounts to an average annual savings of $1,340.56—meaning $40,216.81 over 30 years.
- Calculated mortgage payments fell the most in the District of Columbia, Massachusetts, and California. These states saw monthly savings of $213.85, $210.42, and $209.26, respectively, averaging $76,023.34 in savings over 30 years.
- Minnesota, South Dakota, and Wisconsin saw the smallest payment decreases. Monthly savings in these states were $24.40, $25.40, and $31.08, respectively. This still translates to an average savings of $9,705.89 over 30 years.
- North Dakota was the only state where mortgage payments increased. Average APRs rose by 0.03 percentage points from 6.81% in July 2024 to 6.84% in July 2025, raising the average monthly payment by $5.16 and resulting in $1,858.24 in additional costs over 30 years.
How much can falling mortgage rates save you?
Over the past year, the average 30-year, fixed-rate mortgage rate has dropped from 7.19% in July 2024 to 6.68% in July 2025, a decrease of 0.51 percentage points.
One contributing factor is multiple cuts to the federal funds rate in fall 2024. The Federal Reserve doesn’t directly determine mortgage rates, but movements in the federal funds rate can sometimes influence their direction. A quarter-point cut in September, the first of 2025, and the potential for more decreases this year have injected confidence that borrowing costs will ease.
Declining mortgage rates are more than just numbers: they mean more affordable homeownership for borrowers. The average calculated monthly mortgage payment across the U.S. was $111.71 lower in July 2025 than in July 2024, providing households with $1,340.56 in annual savings and a remarkable $40,216.81 in savings over the life of a 30-year mortgage.
How do changing APRs impact calculated mortgage payments across the U.S.?
“These savings are big,” says Matt Schulz, LendingTree chief consumer finance analyst and author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.” “Rate declines not only can help make homeownership more attainable, but they also can help consumers balance their financial goals.”
Calculated mortgage payments fell most in the District of Columbia
Borrowers in the nation’s capital experienced the largest decrease in average calculated monthly mortgage payments, dropping $213.85 from $3,160.51 in July 2024 to $2,946.66 in July 2025. This amounts to $2,566.14 in annual savings, and $76,984.34 over 30 years. Mortgage rates decreased by 0.69 percentage points on average in DC.
| Stats | July 2024 | July 2025 | Difference |
|---|---|---|---|
| Avg. APR | 7.19% | 6.68% | 0.51 percentage points |
| Calculated monthly payment | $2,157.21 | $2,045.49 | $111.71 |
Massachusetts and California had the next highest calculated payment decreases, dropping $210.42 and $209.26, respectively. Mortgage rates decreased 0.72 percentage points in Massachusetts and 0.64 percentage points in California. This means Massachusetts borrowers will save $2,525.09 annually ($75,752.61 over 30 years), while California borrowers will save $2,511.10 annually ($75,333.06 over 30 years).
Mortgage rate decreases in the District of Columbia, Massachusetts, and California were above the average across the U.S. of 0.51 percentage points, resulting in greater potential savings for borrowers in those locations. But Schulz reminds us to keep things in perspective: higher mortgage payment savings are also connected to higher home prices and larger loan amounts.
“[DC, Massachusetts, and California] are three very expensive places to live, especially when it comes to housing,” Schulz says. “Because homes are so expensive there, the dollar savings from a small rate decrease will be greater than they would be in other locations.”
Calculated mortgage payments fell least in Minnesota
Minnesota borrowers saw the smallest drop, averaging $24.40 a month, $292.81 annually, and $8,784.45 over 30 years. South Dakota saw the next smallest payment decrease: $25.40 monthly, $304.76 annually, and $9,142.86 over 30 years. Wisconsin follows with $31.08 monthly, $373.01 annually, and $11,190.38 over 30 years.
Minnesota, South Dakota, and Wisconsin had the lowest rate decreases—0.12, 0.15, and 0.17 percentage points, respectively—all significantly lower than the average across the U.S. (0.51 percentage points).
Only North Dakota experienced a rate increase, albeit a miniscule one. The average rate rose by 0.03 percentage points, from 6.81% in July 2024 to 6.84% in July 2025, resulting in a $5.16 increase in the average calculated monthly payment and $1,858.24 in additional costs over 30 years.
Because savings are directly proportional to the size of the mortgage, a rate drop can result in a less significant impact, such as in the Midwest where home prices and mortgage amounts are lower than average compared to coastal or high-cost markets.
Tips for finding the lowest APR
The lowest possible APR can make a major difference in your monthly payment and long-term mortgage costs. “Because houses are so expensive, even a tiny reduction in APR can mean thousands and thousands of dollars saved over the life of the mortgage,” said Schulz.
Here are some strategies to lower that APR:
- Shop around – “It’s hard to overstate how important it is to compare rates from different lenders when shopping for a mortgage,” Schulz says. “Rates can vary significantly from one lender to the next, so if you don’t take the time to shop around for rates, you’re likely doing yourself and your family a disservice.” Studies have shown that borrowers can save as much as $80,000 by simply getting multiple mortgage quotes.
- Boost your credit score – Basically, a higher credit score can equal a lower APR, because it signals less risk to lenders. Maintain an on-time payment history (the most significant factor in your credit score) for your loans, credit cards, and any other debt payments. Additionally, keep your credit utilization low and avoid taking on new debt as you prepare to apply for a mortgage.
- Consider your down payment – A larger down payment can lower your loan-to-value ratio, reducing risk and potentially helping you secure a better rate.
- Evaluate loan types and terms – Consider all your options for your mortgage. For example, adjustable-rate mortgages (ARMs) carry lower interest rates than fixed-rate loans, and 15-year mortgages have lower rates than 30-year loans. However, the risks associated with ARMs and the higher payments of shorter-term loans aren’t for everyone. Select the options that best align with your financial goals.
- Negotiate, and ask about discounts – Some lenders may offer rate reductions for autopay enrollment, for existing customer relationships, or by paying points up front.
“You have much more power over mortgage rates than you think you do,”said Schulz . “You can’t control when rates rise or fall. You can’t control when the Fed makes moves. However, 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. Those and other options are available to you if you have your heart set on lowering your mortgage rates. Just make sure that you do your homework so you know what you’re getting into before you act.”
To read more, click here.
The post How Much Could Falling Mortgage Rates Save Over the Lifetime of a Loan? first appeared on The MortgagePoint.
