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• Mortgage interest is the fee you pay to borrow money from a lender, usually expressed as a percentage of the loan amount.
• Fixed-rate mortgages provide stability, while adjustable-rate mortgages (ARMs) offer fluctuating rates.
• Mortgage rates are influenced by economic conditions and the borrower’s financial profile.
• Even a small change in mortgage rates can make a big difference in your monthly payments and the total amount you’ll pay over the life of the loan.
• Pennsylvania has a variety of programs to help first-time homebuyers.
Introduction to Mortgage Refinance Rates
Mortgage rates are a key consideration for anyone buying a home or refinancing an existing home loan. After all, the interest rate plays a big part in how much your monthly mortgage payment will be. The type of mortgage, the size of the loan, the down payment, the length of the loan, the lender, and your credit score all play a role in what your mortgage rate will be. In this guide, we’ll cover how a mortgage interest rate is determined, what factors affect the rate you can get in Erie, Pennsylvania, and how you can get the best rate possible.
First-time homebuyer programs are the fees charged by lenders for borrowing money to purchase a home. These mortgage rates are determined by a complex combination of factors that can be separated into two buckets: the state of the economy and the borrower’s financial status.
Where Mortgage Rates Come From
Mortgage rates are the result of a complex interplay between the broader economic landscape and your personal financial situation. Keep an eye on the bond market, especially the 10-year U.S. Treasury Note, as rates often rise or fall in tandem with this bond price. A cooling housing market can mean lower rates, while a robust economy and rising inflation can nudge them upward.
But economic factors are only part of the picture. Your own financial stats add another layer of complexity as a lender decides what rate to offer you. Lenders will look at the following:
• Your credit score A conventional mortgage (one not backed by a government agency) typically requires a credit score of 620 or higher. The higher the score, the lower the rate you’ll likely get.
• Your down payment amount Making a larger down payment can result in a lower interest rate because lenders see a lower default risk.
• Your debt-to-income (DTI) ratio Mortgage lenders generally like to see a DTI ratio of no more than 36%, though that is not necessarily the maximum.
See how your debts may affect your mortgage
Use SoFi’s debt-to-income calculator to determine your personal DTI number.
How Interest Rates Affect Home Affordability
Mortgage rates are a big deal, especially when it comes to buying your first home. Let’s say you’re looking at a $200,000 loan with a 30-year term. At a 6.50% interest rate, your monthly payment would be around $1,264. But if that rate creeps up to 7.00%, you would be paying $1,330 each month. Over 30 years, that seemingly small difference in interest rate adds up to almost $25,000, as you can see from the chart below.
Interest Rate
Monthly Payment
Total Interest
6.00%
$1,199
$231,677
6.50%
$1,264
$255,085
7.00%
$1,330
$279,021
7.50%
$1,398
$303,403
8.00%
$1,467
$328,309
Erie Mortgage Rate Trends
Historical U.S. Mortgage Rates
Having a sense of the history of mortgage rates can provide perspective on current rates for those purchasing property in Erie. While rates have gone up in the last few years, they are still relatively low compared to significantly higher rates of, say, the 1980s. The graph shows a half-century of average mortgage rates. The chart shows how Pennsylvania has tended to stack up against national averages.
Year
Pennsylvania Rate
U.S. Rate
2000
7.97
8.14
2001
7.00
7.03
2002
6.53
6.62
2003
5.78
5.83
2004
5.85
5.95
2005
6.02
6.00
2006
6.49
6.60
2007
6.31
6.44
2008
6.04
6.09
2009
5.16
5.06
2010
4.85
4.84
2011
4.59
4.66
2012
3.65
3.74
2013
3.90
3.92
2014
4.20
4.24
2015
3.96
3.91
2016
3.76
3.72
2017
4.07
4.03
2018
4.58
4.57
Source: Federal House Finance Agency
Types of Mortgages Available in Erie
In Erie, you have many types of mortgage loans to consider. Before you begin your home loan search, familiarize yourself with some of the more common kinds:
Fixed-Rate Mortgage
Fixed-rate mortgages are the bedrock of home financing, offering a steady interest rate over the entire loan term. This means your monthly payments remain constant, providing peace of mind and budgeting ease. You’ll find these mortgages available in 10, 15, 20, 30, or even 40-year terms, allowing you to select the one that best aligns with your financial objectives. The shorter the loan term, the higher your monthly payments will be, but the less interest you will pay over the life of the loan. For those of you ready to make a home in Erie, a fixed-rate mortgage is your ticket to a clear financial roadmap.
Adjustable-Rate Mortgage (ARM)
Adjustable-Rate Mortgages (ARMs) often start off at a lower interest rate than fixed-rate loans, which can be quite appealing. After this introductory rate period, however, the rate on an ARM could adjust up or down according to market conditions. Some buyers are game to take this risk — perhaps they envision their income growing in the future, or they plan to relocate and sell before the introductory period ends. If you do pursue an ARM in Erie, run the numbers at the intro rate and above it, so you can be fully aware of how your payments might change in the future.
FHA Loan
Backed by the Federal Housing Administration (FHA), these loans are often the go-to for first-time buyers and those with credit scores on the lower end, requiring only a 3.5% down payment for those with a minimum credit score of 580. Buyers with a lower score (but a minimum score of 500) can also potentially qualify with a 10% down payment. The FHA’s flexible credit requirements and low down payments make the dream of owning a home a reality for many.
VA Loan
VA loans are a great option for those who have served our country. The loans are available to eligible active-duty military personnel, veterans, reservists, National Guard members, and surviving spouses. The biggest benefit of a VA loan is that it typically doesn’t require a down payment. This makes it a great option for those who have limited savings. VA loans also offer other benefits such as lower interest rates than conventional loans. The first step toward a VA loan is to seek a Certificate of Eligibility from the VA.
Jumbo Loan
In most areas of Pennsylvania, including Erie, the conventional mortgage loan limit is $806,500 for a single-family home. Jumbo loans are designed for borrowers whose needs exceed this limit. These specialized loans often come with higher interest rates and stricter qualification criteria, including a higher credit score and a larger down payment. For homebuyers in Erie, comparing mortgage rates can help you find the best jumbo loan option to fit your budget and financial goals.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Wondering if You Should Wait for Interest Rates to Fall?
Homebuyers in Erie might be pondering whether to hold off on a purchase in hopes of a future drop in interest rates. Current predictions suggest that interest rates are expected to remain relatively stable through 2025, ending the year around 6.30%. This suggests that if you are financially prepared to purchase a home now, it might make sense to go ahead. Remember that you have the option to undertake a mortgage refinance down the line if rates do happen to dip.
The Cost of Living in Erie
Erie offeres a comfortable cost of living that is 12 percent below the average cost of living in the U.S. Food, housing, and health care are all more affordable than average here. The median home sale price in Erie is a remarkably low $142,000, according to Redfin, less than half the national median sale price, which tops $400,000. The housing market in Erie is very competitive, however. Many homes get multiple offers, some with waived contingencies.
Get Your Best Possible Rate in Erie
To land the most favorable mortgage rates in Erie, you’ll want to start by ensuring your credit score is strong. This can open the door to better loan terms. Check your credit report for inaccuracies, and pay every bill on time. Next, work on reducing your monthly debts to achieve a debt-to-income (DTI) ratio of 36% or less. A higher down payment can also work in your favor, potentially helping to secure a lower interest rate. Going through the mortgage preapproval process is a smart move. It will help you understand exactly what a lender thinks you can afford to borrow, and having preapproval will be helpful in Erie’s competitive home-buying market.
Helpful Tools & Calculators
A mortgage payment calculator can be a very helpful tool, allowing you to estimate your potential monthly payments and the overall cost of different mortgage rates in Erie. It’s just one of our favorite homebuyer calculators.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Evaluate Loan Offers in Erie
Securing a competitive mortgage rate is a key step in saving money over the life of your loan. You’ll want to spend some time comparing loan offers in Erie. Once you’ve gotten interest rates and fees from several lenders, do a side-by-side comparison. Don’t just study the interest rates — focus on the annual percentage rate (APR), which encompasses fees, closing costs, and discount points. Once you have found a loan that is attractive to you, you can usually lock in the rate for up to 90 days, providing peace of mind. (Lenders do tend to charge a fee for a rate lock.)
Erie Mortgage Resources
Pennsylvania offers several programs to aid homebuyers, especially those who are in the market for the first time or who have limited financial means. The Pennsylvania Housing Finance Agency (PHFA) is your best resource, with offerings like the Keystone Advantage Assistance Loan program and the HOMEStead Down Payment and Closing Cost Assistance Loan. Down payment assistance programs and loans with forgiving terms can significantly ease the financial load of purchasing a home. And remember to explore local programs in Erie for possible added support.
Homebuyers in Erie can expect to pay between 2% and 5% of the loan amount in closing costs. The total amount you’ll pay can vary based on the home’s purchase price and its location. Common closing costs include loan origination fees, appraisal fees, and title insurance. To keep these costs down, it’s important to shop around for the best rates and terms and to negotiate with your lender. Understanding what’s included in your mortgage payment can help you budget more effectively and find the most cost-effective loan for your needs.
The Takeaway
Erie’s mortgage landscape offers a wide variety of options for people looking to buy a home in the area. By keeping an eye on current mortgage rates in Erie and looking into available assistance programs, you can make more strategic and informed decisions that align with your financial goals. Whether you’re a first-time buyer or a seasoned homeowner, taking the time to compare mortgage rates in Pennsylvania can potentially lead to significant savings.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Right now, the latest forecast suggests that the average mortgage rate will end 2025 at around 6.30%. But predicting the exact movements of mortgage rates is no easy feat. Keep an eye on economic trends and the price of the 10 Year Treasury Note for a hint of what is to come.
Will Erie, Pennsylvania home prices ever decrease?
Erie home prices are a reflection of supply and demand, as well as larger economic factors. But the median home sale price in Erie is already quite low for a U.S. city, so it seems unlikely that you will see a dramatic drop any time soon.
How do I lock in a mortgage rate?
To lock in a mortgage rate, you’ll need to examine your finances and shop around to find the loan with the best rate, term, and fees for your budget. Once you determine your ideal loan, locking it in is just about making a simple call or sending a message to your chosen lender. You’ll pay a fee to lock in your preferred rate for up to 90 days while you solidify your home purchase.
How do interest rates on mortgages work?
Mortgage interest rates reflect the cost of borrowing money and are usually expressed as a percentage of the loan amount. These rates are influenced by both your personal financial profile and the broader economy. Rates can be fixed or variable. When you make a payment, a portion of it goes toward the principal that you owe and a portion of it pays for the interest. To see what amount is going where, review the amortization schedule for your loan.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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