Will mortgage interest rates drop after this week's Fed meeting?

Mortgage interest rates have been dropping recently and may continue to fall after this week's Fed meeting. BangWan/Abu Hanifah/Getty Images

All eyes will turn toward the Federal Reserve this week as the central bank holds its penultimate meeting of 2025 to determine monetary policy and the future of interest rates.

The bank issued a rate cut in its last meeting in September , its first of the year. That followed a pause for most of 2025 after the central bank cut rates three times in the final months of 2024 . As of Monday morning, there was around a 97% chance the Fed would cut rates again in this week's meeting, according to the CME Group's FedWatch tool. While the expectation is that the federal funds rate will be reduced by 25 basis points, any relief here will help