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Trump Won! What it Means for Mortgage Rates in 2025

by Levi Rodgers | Nov 7, 2024 | News

Last Updated June 17th, 2025

With Donald Trump set to assume the presidency in 2025, many are closely watching how his policies will affect mortgage rates and the housing market.

Known for his focus on tax cuts, deregulation, and a strong American economy, Trump’s approach could reshape the financial landscape, impacting homeowners, potential buyers, and lenders alike.

Whether you’re already a homeowner or planning to buy soon, understanding these anticipated changes can help you make informed decisions in an evolving market.

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In this Article

  • Trump’s Economic Policies: How They Affect Mortgage Rates
  • Federal Reserve and Mortgage Rates: What to Expect
  • Mortgage Rate Forecast for 2025
  • How Rising Rates Affect Monthly Payments
  • FAQs on Trump’s Win and Mortgage Rates

Trump’s Economic Policies: How They Affect Mortgage Rates

One of Trump’s hallmarks has been his focus on tax cuts and deregulation. These policies aim to boost economic growth but can also lead to higher deficits. Here’s how these strategies may shape the mortgage landscape in the coming years.

  • Tax Cuts: Tax reductions typically aim to spur economic growth, but they also increase government spending and national debt. This could lead to inflation, which often pushes mortgage rates higher. For instance, during Trump’s previous term, similar policies led to increased demand, which contributed to a rise in housing prices.
  • Deregulation: Trump’s approach to deregulation could make mortgage access easier, benefiting potential buyers by simplifying requirements. However, increased demand due to easier mortgage approval might drive up rates.

Current Mortgage Rate Statistics

Based on Freddie Mac’s data, the average 30-year fixed mortgage rate currently hovers around 7.0%. As rates fluctuate, staying updated on economic shifts, such as those reported on Bankrate, is essential.

YearAverage 30-Year Fixed RateKey Economic Factors
20224.5%Pandemic recovery
20235.5%Federal rate hikes
20247.0%Inflation control measures
2025 (proj.)7.5% to 8.0%Trump’s fiscal policies, inflation

“Mortgage rates in 2025 could reach levels unseen in over a decade,” says Jordan Kelly, Chief Economist at Secure Mortgage Solutions. “Higher rates mean potential buyers should plan ahead and consider fixed-rate options.”

Federal Reserve and Mortgage Rates: What to Expect

The Federal Reserve plays a crucial role in shaping mortgage rates by controlling interest rates. When the Fed raises rates, mortgage rates often follow suit. Currently, efforts to curb inflation have led the Fed to raise rates steadily. If Trump’s policies increase inflation, the Fed may continue this trajectory.

According to Federal Reserve statistics, the rate of inflation directly correlates with the frequency of Fed rate hikes. Here’s a look at how Federal policy may impact mortgages:

ScenarioFederal Reserve ActionLikely Mortgage Impact
Rising inflationIncrease in interest ratesHigher mortgage rates
Stable or low inflationMaintain current ratesMortgage rates stabilize
Economic slowdownPotential rate cutsMortgage rates may decrease

Tips for Homebuyers

  • Consider Fixed-Rate Mortgages: In a fluctuating market, fixed-rate mortgages offer stability.
  • Evaluate Loan Limits and Benefits: For those eligible, a VA loan could provide lower rates compared to conventional loans. Learn more about VA Loan Limits and other benefits at VA Loan Network.

“If inflation trends upward, the Federal Reserve’s actions could substantially increase mortgage rates,” explains Taylor Grant, Financial Strategist at Global Housing Partners. “Homebuyers should brace for higher monthly payments and consider locking in a rate sooner rather than later.”


Projected Mortgage Rates Under Trump’s Policies

 

Inflation and Government Spending
Higher government spending without tax increases can push inflation upwards. In turn, higher inflation often results in the Fed increasing interest rates, which leads to higher mortgage rates. The current inflation rate, as tracked by U.S. Bureau of Labor Statistics, already points to upward pressure on costs.

Mortgage Rate Forecast for 2025

YearProjected 30-Year Fixed RateContributing Factors
20247.0% – 7.5%Inflation control, Fed rate hikes
20257.5% – 8.0%Inflation, Trump’s policies
20268.0% or higherLong-term inflation, deficit spending

For prospective VA borrowers, securing a VA Loan could be a practical choice. VA Loan Process offers step-by-step guidance on obtaining a VA loan, which can be more affordable than other options, especially in a high-rate environment.


Tips for Managing Mortgage Costs in 2025

For those concerned about rising rates, there are practical steps to reduce the impact on mortgage costs:

  • Lock in a Rate: If you’re close to buying, locking in a rate can protect you from future increases.
  • Adjustable-Rate Mortgage (ARM) Consideration: In high-rate climates, ARMs can offer lower initial rates. Check out the VA Loan Guide to see how ARM options work with VA loans.
  • Increase Your Down Payment: A larger down payment can reduce your loan-to-value ratio, potentially qualifying you for a better rate.

“In a high-rate market, consider alternative financing options or additional down payment strategies,” advises Rachel Kim, a Senior Loan Advisor with ChoiceLending. “Being proactive in managing your mortgage can save thousands over time.”

How Rising Rates Affect Monthly Payments

To illustrate how higher rates impact payments, see the table below for estimated monthly costs based on mortgage rate increases.

Mortgage Rate (%)Loan Amount ($)Monthly Payment ($)
6.5300,0001,896
7.0300,0001,996
7.5300,0002,097
8.0300,0002,201

Even a slight increase in the mortgage rate can significantly impact your monthly payments, making it crucial to plan ahead.

FAQs on Trump’s Win and Mortgage Rates

Will mortgage rates rise in 2025 due to Trump’s policies? Copied!


Likely, as inflation and deregulation can drive rates higher.

How does inflation affect mortgage rates? Copied!


Inflation often leads the Fed to increase interest rates, which raises mortgage rates.

Can VA loans shield veterans from high mortgage rates? Copied!


Yes, VA loans often have lower rates and better terms, especially for eligible veterans.

Should I consider an adjustable-rate mortgage in 2025? Copied!


If rates are high, ARMs may offer a lower initial rate, but risks apply if rates increase further.

How can I secure a lower rate if rates are rising? Copied!


Consider increasing your down payment or paying discount points to reduce the rate.

Will the Fed cut rates if the economy slows? Copied!


Possibly. If the economy faces recessionary pressures, rate cuts may follow.

How does government spending impact mortgage rates? Copied!


Increased spending without offsetting revenue can lead to inflation, increasing mortgage rates.

What’s the difference between VA and conventional loan rates? Copied!


VA loans generally offer lower rates and more favorable terms than conventional loans.

Levi Rodgers
Levi Rodgers

Levi Rodgers is a real estate expert and retired U.S. Army Green Beret. He writes about VA loans, homeownership, and helping Veterans buy homes. After service, he built a top real estate team and shares trusted advice for first-time and military buyers. Get to know Levi Rodgers

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