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• Boosting your credit score and upping your down payment can lead to lower rates.
• Rates have fluctuated significantly over the past two decades.
Introduction to Mortgage Refinance Rates
Welcome to our guide on mortgage rates in Tucson, Arizona. Here, we’ll dive into how these rates are determined in the local market and how you can secure the most favorable mortgage rate for your specific needs. Understanding the various factors that influence mortgage rates in Tucson is crucial for making a well-informed decision regarding your home purchase and home loan. Your first to-do? Understanding how lenders determine what rate they will offer you.
First-time homebuyer programs usually consider anyone who hasn’t owned a home in the previous three years to be a “first-timer.” If you think you might qualify as a first-time homebuyer, you could enjoy special benefits such as lower down payment minimums, grants, and closing cost assistance.
Where Mortgage Rates Come From
Mortgage rates are the result of a complex interplay of economic factors and your personal financial standing. Let’s break down the two categories and look at them in more depth:
Economic Factors Influencing Mortgage Rates
• The bond market, particularly the 10-year U.S. Treasury Note, usually signals where mortgage rates are headed. When its rates rise, mortgage interest tends to go north as well.
• The health of the housing market also plays a role. When the market is soft, lenders may lower rates to attract buyers.
• Inflation and unemployment are important too. A strong economy is often accompanied by higher rates.
Borrower Factors Influencing Mortgage Rates
• Your credit score is the leading indicator of your creditworthiness. Lenders typically seek a credit score of 620 or above for favorable terms, but the higher, the better. Government-backed loans may provide opportunities for those who can’t hit the 620 mark.
• The amount of your down payment is also a factor. A larger down payment can result in a lower interest rate because you’ll be perceived as a lower default risk by lenders.
• Your debt-to-income (DTI) ratio will be examined. In general, mortgage lenders like to see a DTI ratio of no more than 36%, though that is not necessarily the maximum.
Discover how your debt level may impact your mortgage.
Try SoFi’s debt-to-income calculator to calculate your DTI number.
Discover how your debt level may impact your mortgage.
Try SoFi’s debt-to-income calculator to calculate your DTI number.
How Interest Rates Affect Home Affordability
The impact of mortgage rates on home affordability is significant. Given Tucson’s home prices, it would not be unusual for a buyer to borrow $300,000, so let’s look at how different rates and loan terms play out for a $300,000 mortgage. As the chart below shows, a one-percentage-point difference in rate for a 30-year loan results in about $70,000 in additional interest over the life of the loan. Choosing a shorter loan term usually means higher monthly payments but less interest paid in the long haul.
Interest Rate
Loan Term
Monthly Payment
Total Interest
6.00%
30-year
$1,799
$347,515
6.00%
15-year
$2,532
$155,683
7.00%
30-year
$1,996
$418,527
7.00%
15-year
$2,697
$185,367
Tucson Mortgage Rate Trends
Historical U.S. Mortgage Rates
The history of mortgage rates in the U.S. is a bit of a rollercoaster. The 30-year fixed-rate mortgage, for instance, hit an all-time high of 18.63% in 1981, a serious challenge for homebuyers. After the financial crisis of 2007, rates dropped.
To get some perspective on what a “high” and “low” rate have looked like over the last half-century, consider the graphic. The accompanying chart shows how Arizona’s rate has compared to the national average in more recent times — as you can see, the state rate is often just below the national average. (The Federal Housing Finance Agency stopped compiling this data after 2018.)
Year
Arizona Rate
U.S. Rate
2000
7.99
8.14
2001
7.00
7.03
2002
6.51
6.62
2003
5.72
5.83
2004
5.73
5.95
2005
5.86
6.00
2006
6.57
6.60
2007
6.46
6.44
2008
6.12
6.09
2009
5.15
5.06
2010
4.81
4.84
2011
4.63
4.66
2012
3.73
3.74
2013
3.85
3.92
2014
4.18
4.24
2015
3.91
3.91
2016
3.76
3.72
2017
4.03
4.03
2018
4.66
4.57
Source: Federal House Finance Agency
Types of Mortgages Available in Tucson
In Tucson, Arizona, you have every type of mortgage loans to choose from. To make the best choice for your personal financial needs, it’s important to understand some basic terminology before you start loan-shopping.
Fixed-Rate Mortgage
Fixed-rate mortgages in Tucson are a go-to for many homebuyers. Because they keep the same interest rate for the entire loan term (anywhere from 10 to 40 years), your monthly payments will be predictable. This makes it easier to budget and plan for the future. Plus, choosing a fixed rate is a great way to safeguard yourself against potential increases in mortgage rates down the road.
Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage (ARM) can be a savvy choice if you’re prepared for the possibility of rising rates. These loans often start with a lower interest rate than their fixed-rate counterparts, which can be a boon for those looking to manage initial costs. However, after this introductory period, the rate may adjust up or down over time, potentially impacting your monthly payment. If you are pretty sure you will sell or are open to doing a mortgage refinance before the introductory period ends, this might be a good fit for you. If you choose an ARM, run the numbers on the loan to see what monthly payments would look like if the interest rate climbs.
FHA Loan
FHA loans, with the backing of the Federal Housing Administration, are made to open doors to homeownership for a broad spectrum of individuals and families. They have more lenient eligibility requirements, including a down payment of just 3.5% for qualified borrowers with a minimum credit score of 580. Borrowers with credit as low as 500 can also be eligible if they are able to put down 10%. If you’re buying your first home in Tucson, an FHA loan could be just the ticket.
VA Loan
VA loans are a fantastic option for those who have served our country, including eligible active-duty military members, veterans, reservists, National Guard members, and surviving spouses. One of the most attractive benefits of a VA loan is that it typically does not require a down payment, making homeownership more achievable for those who have served. In Tucson, VA loans offer competitive mortgage rates and flexible terms, which can help service members and their families secure a home with minimal upfront costs and financial burden.
Jumbo Loan
In Arizona, as in most of the U.S., a conventional mortgage loan is capped at $806,500 for a single-family home. A jumbo loan is for buyers whose needs exceed this limit. These loans often come with higher interest rates and stricter qualification criteria, but they can be a good option for high-value properties. In Tucson, where the median home sale price is $325,000, jumbo loans may be less common, but they are still available for those looking to purchase more expensive properties.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Should You Wait for Interest Rates to Drop?
If you’re eager to purchase a home in Tucson, you might be pondering whether to hit the pause button and wait for more attractive mortgage rates. Given current economic uncertainties, it’s difficult to say. In early 2025, predictions suggested that interest rates would remain relatively stable through 2025, ending the year at 6.30%. While it’s tempting to bide your time, remember that the sooner you make your purchase, the sooner you begin to build equity (assuming you are buying your first home). And should rates take a dip in the future, refinancing can be an invaluable tool in your homeowner’s kit.
The Cost of Living in Tucson
When it comes to the cost of living, Tucson is a pretty welcoming town. Food and transportation costs here are below average for the U.S. so the average monthly expenses for one person shouldn’t be unmanageable. Here’s how Tucson compares to other Arizona cities on a cost-of-living index where 100 equals the average cost of living in the U.S.
City
Cost of Living
Bullhead City
92.8
Flagstaff
121.6
Lake Havasu City
125.2
Phoenix
106.3
Prescott-Prescott Valley
120.2
Surprise
102.9
Tucson
98.0
Get Your Best Possible Rate in Tucson
To secure the best mortgage rates in Tucson, there are several key steps to take. First, focus on improving your credit score and lowering your debt-to-income (DTI) ratio. A higher credit score and a DTI below 36% can lead to better rates offered by lenders. Review your credit report for any inaccuracies and pay your bills on time. To the extent possible, pay down debts and don’t incur new ones. Increasing your down payment can also be beneficial.
You’ll also want to explore government-backed loans like VA or FHA mortgages. Consider undertaking the mortgage approval process with a lender to get a pretty solid sense of what you’ll be able to borrow. (Having a mortgage preapproval letter can show sellers that you are serious, so if the market is competitive it can give you an edge.)
Helpful Tools & Calculators
Online mortgage calculators are a great way to get an idea of what you can expect to pay each month, so you can understand how that fits into your overall cost of living. These are three calculators you’ll find useful during your home search.
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 Tucson
Securing a competitive mortgage rate is a smart financial move. Even a seemingly small difference in rates can add up to significant savings over the life of your loan. When comparing loan offers in Tucson, Arizona, be sure to look at the big picture. The annual percentage rate (APR) is an important number, as it factors in fees, closing costs, and discount points. Worried about rates creeping up? For a sense of security, many lenders offer the option to lock in your rate for up to 90 days, for a fee. It’s a small price to pay for peace of mind and financial stability.
Tucson Mortgage Resources
Arizona has programs available for homebuyers who are entering the market for the first time and for those with limited financial means. (As noted above, you could still qualify as a first-time homebuyer if you haven’t owned a primary residence in the past three years.)
Home+Plus is a down payment assistance program that offers a 30-year fixed-rate mortgage and up to 4% in down payment assistance. The Pathway to Purchase Homebuyer Assistance Program provides up to $20,000 in down payment assistance, even for those who aren’t first-time buyers.
Closing Costs in Tucson
If you’re buying a home in Tucson, Arizona, you can expect to pay between 2% and 5% of your loan amount in closing costs. The total you’ll pay can vary greatly depending on your home’s purchase price and its location within the city. Common closing costs in Tucson include loan origination fees, appraisal fees, and title insurance. For a home priced at $325,000, the average closing costs could range from $6,500 to $16,250. Knowing what to expect can help you budget for these costs and ensure a smooth closing.
The Takeaway
By keeping your finger on the pulse of current mortgage rates in Tucson and exploring the available homebuyer assistance programs, you can make savvy decisions that align with your financial aspirations and set yourself up for successful homeownership. Whether you’re a first-time buyer or a seasoned homeowner eager for a change, mortgage rates in Arizona can have a significant impact on your overall financial health.
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.
What is “normal” to one Tucson homebuyer may be abnormal to another. While rates have increased in recent years, they are still well below peaks seen in previous decades. So waiting for “normal” rates may be less helpful than examining whether you can afford to purchase a home and asking yourself whether this is the right time to do so. If you’re relocating to the area for work or having a baby or really want to build equity vs. rent a home, the answer could be yes.
Will Tucson, Arizona home prices ever drop?
The ebb and flow of home prices in Tucson, Arizona are influenced by a variety of factors. While short-term fluctuations may occur, the overall trend for home prices historically tends to be upward. The Tucson Housing Market has seen steady growth in 2025, fueled by population increases and economic expansion. This would normally bring more competition and higher prices. However Tucson properties remain somewhat more affordable than other major cities in the region.
How do you lock in a mortgage rate?
Locking in your mortgage rate can be wise. Once you have compared mortgage offers from different lenders, determine your preferred rate, term, and lender. Ask the lender if you can lock in the rate — typically for a period of up to 90 days. This will give you time to close without worrying about rising rates. Rate locks are sometimes free but often cost between 0.25% and 0.50% of the loan amount.
How do mortgage interest rates work?
Mortgage interest is the fee you pay to a lender for the privilege of borrowing money to purchase a home. It’s usually expressed as a percentage of the loan amount. Interest is a big part of your total loan cost, so it’s important to get a good rate. Fixed-rate mortgages have the same interest rate for the entire term of the loan, while adjustable-rate mortgages (ARMs) have rates that can change over time.
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*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.
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.
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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