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Compare mortgage rates in Massachusetts.
Key Points
• Mortgage rates in Massachusetts tend to run just below the national average, at least in recent decades.
• Factors affecting mortgage rates include inflation, unemployment, Federal Reserve’s monetary policy, credit score, and down payment.
• Massachusetts offers various mortgage types: fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, USDA loans, and jumbo loans.
• Mortgage rates in Massachusetts follow seasonal patterns, with higher rates in spring/summer and lower rates in fall/winter.
• Tips for securing a competitive mortgage rate: compare interest rates, get preapproved, lock in your rate, explore assistance programs, and understand closing costs.
Introduction to Mortgage Rates
Mortgage interest rates play a huge role in determining the overall cost of a home. These rates are influenced by a multitude of factors, broadly categorized into two groups: the state of the economy and the borrower’s financial status.
Lenders consider a borrower’s credit score, income, assets, and the property’s value, among other factors, to determine the appropriate interest rate. Economic factors that impact mortgage rates include the Federal Reserve’s interest rate decisions, inflation, and the unemployment rate.
This comprehensive guide provides Massachusetts house hunters with valuable insights into mortgage rates, helping you navigate the complexities of the mortgage market and make well-informed decisions.
Where Do Mortgage Rates Come From?
The Federal Reserve, also known as the Fed, sets the short-term interest rates that banks use. These serve as a benchmark for home loan rates. When the Fed lowers its interest rate, mortgage rates tend to follow. Other economic conditions and market dynamics also play a role in shaping mortgage rates.
How Interest Rates Affect Home Affordability
Mortgage rates have a profound impact on home affordability, something often overlooked by homebuyers. Even seemingly small changes in interest rates can significantly influence the monthly mortgage payments and the overall cost of purchasing a home.
For instance, a difference of just one percentage point in the interest rate can translate into tens of thousands of dollars over the life of a 30-year mortgage. This highlights the importance of carefully considering interest rates when making home-buying decisions.
Should Homebuyers Wait for Interest Rates to Drop?
Many first-time homebuyers grapple with the dilemma of whether to purchase a home immediately or wait for interest rates to decrease. Here are a few considerations that can help you make an informed decision.
Waiting for interest rates to drop may seem like a prudent strategy, but remember that rates have been known to rise unexpectedly. Homebuyers should also consider the opportunity cost of delaying a purchase, as home prices may appreciate during the waiting period.
If you move forward with your home purchase and rates do drop, you can always turn to a mortgage refinance (more on that to come). This option provides flexibility and enables homebuyers to take advantage of favorable market conditions without having to wait for the ideal interest rate.
Recommended: Best Affordable Places in the U.S.
Massachusetts Mortgage Rate Trends
Understanding historical mortgage rate trends in Massachusetts can provide valuable insight into potential future rate movements. While rates have experienced fluctuations over the years, they remain within reasonable ranges compared to historical highs.
Currently, mortgage rates in Massachusetts hover around the 50-year average, indicating a relatively stable market. However, it’s wise for homebuyers to stay informed about economic conditions and market trends. By monitoring mortgage rate trends and staying updated on economic news, homebuyers can better anticipate potential rate changes and plan accordingly.
| Year | Utah Rate | U.S. Rate |
|---|---|---|
| 2000 | 7.88 | 8.14 |
| 2001 | 6.93 | 7.03 |
| 2002 | 6.38 | 6.62 |
| 2003 | 5.55 | 5.83 |
| 2004 | 5.38 | 5.95 |
| 2005 | 5.62 | 6.00 |
| 2006 | 6.32 | 6.60 |
| 2007 | 6.30 | 6.44 |
| 2008 | 5.96 | 6.09 |
| 2009 | 4.86 | 5.06 |
| 2010 | 4.76 | 4.84 |
| 2011 | 4.44 | 4.66 |
| 2012 | 3.63 | 3.74 |
| 2013 | 3.71 | 3.92 |
| 2014 | 3.94 | 4.24 |
| 2015 | 3.71 | 3.91 |
| 2016 | 3.54 | 3.72 |
| 2017 | 3.86 | 4.03 |
| 2018 | 4.33 | 4.57 |
Historical U.S. Mortgage Rates
To provide a broader perspective, it is helpful to examine historical U.S. mortgage rates. Over the past few decades, rates have experienced periods of both stunning highs and unusual lows. By studying historical rate trends, homebuyers can gain a deeper understanding of the cyclical nature of mortgage rates and make more informed decisions about their home-buying timeline.
Factors Affecting Mortgage Rates in Massachusetts
Numerous factors influence mortgage rates in Massachusetts and across the country. As noted above, these factors can be broadly categorized into economic conditions and consumer-specific considerations.
While individuals have no control over larger economic forces, homebuyers do have control over a number of variables that influence the mortgage rates they’re offered.
Economic Factors
First, let’s take a closer look at the economic factors at work to determine mortgage rates:
• The Fed: The Fed’s decisions have an indirect impact on mortgage rates. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, leading to a potential increase in mortgage rates. Conversely, when the Fed lowers the federal funds rate, borrowing becomes cheaper, which can result in more favorable mortgage rates for homebuyers.
• Inflation: Inflation, measured by the Consumer Price Index (CPI), reflects the rate at which the prices of goods and services increase over time. When inflation rises, the purchasing power of money decreases, and consumers observe an escalation in the cost of living. But inflation also makes it more expensive for lenders to lend money. As a result, lenders may increase interest rates to compensate for the loss in purchasing power, leading to higher mortgage rates.
• Unemployment rate: The unemployment rate is a key indicator of the overall health of the economy. A low unemployment rate generally signifies a strong economy, which often leads to increased demand for housing. This increased demand can put upward pressure on home prices and, consequently, mortgage interest rates.
Consumer Factors
Here’s the best part. Consumer-specific factors also play a role in determining mortgage rates. These are the things that savvy individuals can change and improve.
• Credit score: A credit score is a numerical representation of your creditworthiness. It’s based on your payment history, credit utilization, and length of credit history, among other things. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, individuals with higher credit scores typically qualify for lower mortgage interest rates.
• Down payment: The down payment is the upfront payment made by the homebuyer towards the purchase of a property. The median down payment for a house is 15%, according to the National Association of Realtors. But a 20% down payment — or even more — is the ideal. A larger down payment reduces the loan amount required from the lender, which lowers the risk for the lender. Consequently, borrowers who make a larger down payment often receive lower mortgage interest rates.
• Income and assets: Lenders carefully assess a borrower’s income and assets to determine their ability to repay the mortgage. A steady income and sufficient assets provide assurance to lenders that the borrower can meet their financial obligations. Borrowers with stable income and substantial assets are more likely to secure lower mortgage interest rates.
• Type of mortgage loan: The type of mortgage loan you choose can also impact the interest rate. For example, adjustable-rate mortgages (ARMs) typically offer lower initial rates compared to fixed-rate mortgages. Additionally, government-backed loans, such as VA loans, may have lower rates. And a shorter loan term generally comes with a lower interest rate than longer terms.
Types of Mortgages Available in Massachusetts
Massachusetts offers a diverse range of mortgage types to cater to the needs of different homebuyers.
Conventional loans are not backed by the government and typically offer competitive interest rates. They can be fixed-rate or adjustable-rate, and typically require a credit score of 620 or higher.
Fixed Rate Mortgage
A fixed-rate mortgage offers stability and predictability. With a fixed-rate mortgage, the interest rate remains the same for the entire loan term. This provides peace of mind to borrowers, as they can accurately budget their monthly mortgage payments without worrying about fluctuating interest rates.
Fixed-rate mortgages are available in various terms, ranging from 10 to 30 years. The choice of loan term impacts the monthly payment amount and the total interest paid over the life of the loan. Shorter loan terms generally result in higher monthly payments but lower total interest paid, while longer loan terms have lower monthly payments but higher total interest.
Adjustable Rate Mortgage
ARMs entice borrowers with lower initial interest rates compared to fixed-rate mortgages. This can be advantageous for homebuyers seeking a lower initial monthly payment. However, the interest rate can adjust periodically, potentially leading to higher monthly payments in the future.
The initial lower interest rate of ARMs can provide cost savings for homebuyers planning to sell their property before the fixed-rate period ends. However, you must carefully consider whether you could financially handle a higher interest rate and monthly payment.
FHA Loan
FHA loans, backed by the Federal Housing Administration, offer more relaxed credit and income requirements compared to conventional loans. This makes them an attractive option if you’re buying your first home or have less-than-perfect credit. FHA loans also allow for lower down payments, making homeownership more accessible.
VA Loans
VA loans are exclusively available to veterans, active-duty military members, certain members of the Reserve and National Guard, and their spouses. These loans provide competitive interest rates and do not require a down payment. Getting a Certificate of Eligibility (COE) is the first step to a VA loan.
USDA Loans
USDA loans, provided by the U.S. Department of Agriculture, cater to low-income borrowers seeking to purchase a home in a rural area. These loans offer competitive interest rates and do not require a down payment, making homeownership more attainable for eligible individuals.
Jumbo Loans
Conventional mortgage loans have a maximum loan amount, known as the conforming loan limit, set by the Federal Housing Finance Agency (FHFA). For 2025, the conforming loan limit for a single-family home in Massachusetts is $806,500, with the exception of Essex, Middlesex, Norfolk, Plymouth, and Suffolk counties, where the limit is $914,250, and Dukes and Nantucket counties, where the limit is $1,209,750.
Jumbo loans are designed for properties that exceed the conforming loan limit. These loans are offered by private lenders and typically carry higher interest rates compared to conventional loans due to the increased risk associated with larger loan amounts.
Popular Places to Get a Mortgage in Massachusetts
Various factors contribute to the attractiveness of a location for obtaining a mortgage, including cost of living, job opportunities, and housing market conditions.
The cost of living in Massachusetts is relatively high: 27.5% higher than the national average. Of course, costs do vary from town to town, as you’ll see below.
Least Expensive Locations
Certain Massachusetts locations offer relatively lower housing prices and more affordable cost of living, making them attractive options for homebuyers seeking value. Here are some of the least expensive locations in Massachusetts for obtaining a mortgage, along with the average home value:
• Greenfield $324,949
• North Adams $247,942
• Pittsfield $299,910
• Holyoke $313,177
• Chicopee $303,273
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Most Expensive Locations
Then there are areas where the average monthly expenses for one person, or a family, is much higher, with home prices to match. These are the most expensive locations in Massachusetts for obtaining a mortgage, with their average home value:
• Boston $750,816
• Cambridge $1,004,826
• Newton $1,456,147
• Wellesley $1,918,005
• Brookline $1,141,809
Tips for Securing a Competitive Mortgage Rate in Massachusetts
Obtaining a competitive mortgage rate can significantly impact the overall cost of homeownership: Even a slight difference in the interest rate can result in substantial savings over the long term. Therefore, homebuyers are advised to research and compare mortgage rates from multiple lenders to secure the best possible rate.
For instance, a difference of just 0.5% in the interest rate on a 30-year mortgage of $300,000 can amount to a difference of over $34,000 in total interest paid. This highlights the significance of securing a competitive mortgage rate.
Compare Interest Rates and Fees
You don’t have to settle for the first mortgage offer you receive — and you shouldn’t. Shop around and compare interest rates and fees from multiple lenders to ensure you are getting the best deal.
In addition to the interest rate, inquire about any upfront costs or closing fees associated with the loan. These fees can vary among lenders and can add to the overall cost of the mortgage.
How to Get Preapproved
Getting preapproved for a mortgage demonstrates to sellers that the homebuyer is a serious and qualified buyer. It also allows homebuyers to move swiftly when they find a suitable property, as they already have a clear understanding of their borrowing power.
Unlike prequalification, which can be completed online quickly, the mortgage preapproval process can take up to 10 days.
Massachusetts Mortgage Resources: Assistance for Homebuyers
Massachusetts offers a variety of resources and programs to assist homebuyers, including down payment assistance programs, affordable housing options, and counseling services to help homebuyers navigate the mortgage process.
First-Time Homebuyer Programs
Massachusetts provides several programs tailored to first-time homebuyers. To qualify as a first-time homebuyer, you must not have had an ownership interest in a principal residence within the last three years.
The My Mass Mortgage: ONE Mortgageprogram offers 30-year fixed-rate loans to low- and moderate-income first-time homebuyers. You can pay a 3% or 5% down payment, depending on the type of home you’re purchasing, and no private mortgage insurance is required. MassHousing Loan provides low-interest fixed-rate loans and mortgage payment protection; requirements include an income limit, minimum credit score, and homebuyer education.
Down Payment Assistance
Down payment assistance programs can help homebuyers overcome the challenge of saving for a down payment. MassHousing Down Payment Assistance offers up to $30,000 to cover your down payment.
Tools & Calculators
Online tools and calculators can help you estimate mortgage payments, compare loan options, and make informed financial decisions.
Run the numbers on your home loan.
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Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
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Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
Provide us with a few details and see how much you can afford to spend on a home purchase.
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.
Refinancing Options in Massachusetts: Exploring Your Possibilities
Refinancing a mortgage can help homeowners secure a lower interest rate, reduce their monthly payments, or access cash for other purposes.
• The FHA Streamline Refinance program allows homeowners with FHA-insured loans to refinance into current mortgage rates with minimal documentation and without the need for a new appraisal.
• The Interest-Rate Reduction Refinance Loan (IRRRL) is available to veterans and active-duty military members with VA loans. It allows borrowers to refinance into a lower interest rate without the need for a new appraisal.
Closing Costs and Fees in Massachusetts: What to Expect
Closing costs in Massachusetts typically range from 2% to 5% of the purchase price of the home. These costs include loan origination fees, appraisal fees, title insurance, and other administrative fees.
The specific closing costs associated with a home purchase in Massachusetts can vary depending on the property value and location. Higher-priced homes and properties in certain areas may incur higher closing costs.
The Takeaway
Massachusetts presents a diverse range of mortgage options, catering to the unique needs and financial situations of homebuyers: From fixed-rate to adjustable-rate mortgages, government-backed loans to conventional loans. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, homebuyers in Massachusetts can make informed decisions that align with their financial goals and achieve successful homeownership.
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.FAQ
What is a mortgage rate?
A mortgage rate is the interest rate charged on a mortgage loan. It determines the amount of interest paid over the life of the loan and significantly impacts the monthly mortgage payment.
Will mortgage rates drop in Massachusetts?
Predicting future interest rate movements is uncertain. While rates can fluctuate, there is no guarantee that they will drop significantly in the short term. Homebuyers should carefully consider their financial situation, housing needs, and long-term plans when deciding whether to wait for lower interest rates or proceed with a purchase at current rates.
Will mortgage rates ever go back to normal?
The definition of “normal” interest rates is subjective and influenced by historical trends and market conditions. Mortgage rates have fluctuated over time and can be affected by various economic factors. It is difficult to predict when or if rates will return to a specific level.
Will Massachusetts home prices ever drop?
Real estate markets are influenced by supply and demand, economic conditions, and local factors. Predicting future home price trends is complex and uncertain. While prices can fluctuate, there is no guarantee that they will drop significantly in the short term. Homebuyers should carefully consider their financial situation, housing needs, and long-term plans when making decisions about purchasing a home.
Is it a good time to buy a house in Massachusetts?
The decision of whether to buy a house depends on various personal and financial factors. There is no one-size-fits-all answer. Homebuyers should consider their financial stability, housing needs, long-term plans, and the local real estate market conditions when making a decision.
How to lock in a mortgage rate?
Borrowers can lock in a mortgage rate by paying a fee to the lender to secure the current rate for a specific period. This can protect borrowers from potential interest rate increases during the loan application process.
How do mortgage interest rates work?
Mortgage interest rates are determined by various factors, including the borrower’s credit score, the loan-to-value ratio (LTV), and prevailing market conditions. Lenders use these factors to assess the risk associated with a loan and set interest rates accordingly.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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.
†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.
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.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. 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.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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More home loan resources.
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First-Time Homebuyer Guide
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Mortgage Preapproval Process