Mortgage rates dropped to their lowest level in more than a year as the Federal Reserve cut short-term interest rates this week. The rate decline offers a refinancing opportunity for some homeowners.

The average rate on a 30-year fixed-rate mortgage fell five basis points to 6.01% APR in the week ending Oct. 30, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

This week’s average rate was the lowest since the week of Sept. 19, 2024, when it averaged 5.89%. More importantly, current rates are substantially lower than in several periods over the past two years. Borrowers with mortgages from those eras might benefit from refinancing to a lower interest rate.

What the Fed’s got to do with it

The Federal Reserve’s monetary policy

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