80% of Mortgage Holders Have Rates Below 6%—But That’s Changing

Mortgage rates this year peaked at 7.04% in January 2025 after climbing through most of Q-4 2024. Since then, they have come down but remain above 6%. Even so, a majority of outstanding mortgages enjoy rates below that percentage.

According to a report from real estate marketing platform Realtor.com, 20.4% of outstanding mortgages had an interest rate below 3% in Q-2 2025. Additionally, 32.1% of outstanding mortgages have an interest rate between 3% and 4%, 17.9% have a rate between 4% and 5%, and 9.9% have a rate between 5% and 6%, meaning that approximately 80% of outstanding mortgage debt is at rates below 6%.

However, as rates remain high for a longer period of time, the share of mortgages with rates above 6% has grown. Quarter-over-quarter, the share of homeowners with mortgage rates above 6% grew by 0.9 percentage points to 19.7%.

Looking at the year ahead, we expect that by the end of 2025, the share of mortgages below 6% could fall close to 75%. Put differently, we expect the share of mortgage holders with a rate of 6% or higher to increase as home shoppers purchase a home in the current 6%-plus rate environment. Recent mortgage rate progress into the low end of the 6% range could encourage some homebuying activity.

The share of homeowners holding a mortgage with a rate of 6% or higher increased 4 percentage points between the second quarter of 2024 and the second quarter of 2025 as buyer activity carried on despite high rates. Even in today’s high-price, high-rate market, homebuying activity around big-life events (e.g., kids, marriage, divorce, etc.) keeps the market in motion. Though the lock-in effect continues to affect the market, a recent survey revealed that 40% of potential buyers would find a home purchase feasible if mortgage rates were to drop below 6%, and 32% of buyers would be willing to participate if rates dropped below 5%. Easing inflation and mortgage rates will be key drivers of seller activity, which will relieve some of the price pressure and competition in today’s under-supplied market.