Compare mortgage rates in Massachusetts.

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.

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

Recommended: The Cost of Living in the U.S.

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.

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.

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.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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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.

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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Compare mortgage rates in Washington.

Introduction to Mortgage Interest Rates

Securing a competitive mortgage rate is crucial for saving money over the life of your home loan. Mortgage interest rates drive the amount a lender charges for borrowing money to purchase a home. In Washington state, mortgage rates are influenced by various economic factors and consumer characteristics. This comprehensive guide provides an in-depth look at mortgage rates in Washington, including historical trends, factors affecting rates, type of mortgage loans available, and strategies for securing a competitive rate.

Where Mortgage Rates Come From

The Federal Reserve, also known as the Fed, plays a pivotal role in determining mortgage rates. The Fed sets the short-term interest rates that banks use as a benchmark for setting their own rates. Although home loan rates are not directly tied to Fed rates, they generally follow the same economic trends. When the Fed raises interest rates, mortgage rates generally rise, and when the Fed lowers rates, mortgage rates typically decline.

But there are also consumer factors that influence rates, including the homebuyer’s credit score, down payment, income, and assets.

How Interest Rates Affect Home Affordability

Mortgage rates have a significant impact on home affordability, often playing a more substantial role than the purchase price of the home itself. Even small changes in interest rates can significantly affect the monthly mortgage payments and the overall cost of homeownership.

For instance, a $300,000 loan with a 30-year term and an interest rate of 4.00% would result in monthly payments of $1,432. If the interest rate increases by just 1 percentage point to 5.00%, the monthly payments would jump to $1,610, adding up to a difference of over $64,000 in total interest paid over the life of the loan.

Should Homebuyers Wait for Interest Rates to Drop?

Many homebuyers, especially novices buying a first home, face the dilemma of whether to purchase a home immediately or wait for interest rates to drop. While it is impossible to predict the future of interest rates with certainty, reading the news about the Fed’s potential action on its rates can help homebuyers make an informed decision.

But ultimately, whether to buy or wait may depend on your personal situation. A lease ending or a baby coming can press the issue. And in some markets, home prices may be rising, which could outweigh any savings on a minor interest rate drop.

Homebuyers who are concerned about rising interest rates may consider locking in a rate now and refinancing later if rates decrease. Most lenders offer a rate lock option, which allows borrowers to secure a specific interest rate for a certain period of time, typically ranging from 30 to 90 days. This can provide peace of mind and protect against potential rate increases during the homebuying process.

Recommended: Average Monthly Expenses for One Person

Washington Mortgage Rate Trends

Understanding historical mortgage rate trends can provide perspective on current rates. Below is a look at almost two decades of Washington rates (the Federal Housing Finance Agency stopped tracking states in 2018). As you can see, Washington’s average rate tends to be a little lower than the U.S. average. This is impressive when you consider that the overall cost of living in Washington is above the national average.

Historical U.S. Mortgage Rates

Looking at the U.S. average rate over a few decades offers further insight. Mortgage rates in Washington state are still below the historical highs experienced in the early 1980s, when rates reached over 18%.

Factors Affecting Mortgage Rates in Washington

Numerous factors influence mortgage rates in Washington and nationwide. Rates are determined by a complex combination of factors that can be broadly categorized into two buckets: the state of the economy and the borrower’s financial status. Let’s examine each in more detail:

Economic Factors

Economic factors that affect mortgage rates include the federal funds rate, inflation, and unemployment rate.

•  The Fed: As mentioned earlier, the federal funds rate set by the Federal Reserve is a key determinant of mortgage rates. When the Fed raises the federal funds rate, banks typically increase their interest rates, including those for mortgages. Conversely, when the Fed lowers the federal funds rate, mortgage rates tend to decrease.

•  Inflation: The general increase in prices of goods and services over time may affect mortgage rates. When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, lenders may increase interest rates.

•  Unemployment: When the unemployment rate (the percentage of the labor force that is unemployed) is high, the Fed may lower its rates to try to stimulate the labor market.

Consumer Factors

Consumer factors that affect mortgage rates include credit score, down payment, income and assets, and the type of mortgage loan.

•  Credit score: This numerical representation of an individual’s credit history and repayment behavior is a key detail lenders examine. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. Individuals with higher credit scores typically qualify for lower mortgage interest rates.

•  Down payment: A larger down payment reduces the amount of money that needs to be borrowed, which lowers the risk for the lender. Consequently, borrowers who make a larger down payment often receive lower mortgage interest rates.

•  Income and assets: A steady income and sufficient assets provide assurance to lenders that the borrower can meet their financial obligations. Borrowers with stable employment, a history of consistent income, and a healthy financial cushion are more likely to secure favorable mortgage rates.

•  Type of mortgage loan: Adjustable-rate mortgages (ARMs) often start with lower initial rates compared to fixed-rate mortgages. Government-backed loans, such as VA loans and FHA loans, may offer lower rates than conventional loans. And shorter loan terms generally come with lower interest rates than longer terms.

Types of Mortgages Available in Washington

Various mortgage types — including fixed-rate, adjustable-rate, FHA, VA, and USDA loans — are available to meet the needs of different homebuyers in Washington. Conventional loans are not insured by the government and are offered by banks and credit unions. They are the most popular type of mortgage loan and can be fixed-rate or adjustable-rate.

Fixed-Rate Mortgage

Fixed-rate mortgages maintain the same interest rate throughout the life of the loan, ensuring that the principal and interest payments remain stable and predictable, which protects against fluctuating mortgage interest rates. These mortgages are available in various terms, commonly ranging from 10 to 30 years. The choice of loan term affects the monthly payment amount and the total interest paid over the life of the loan. Shorter loan terms generally have higher monthly payments but lower total interest paid, while longer loan terms have lower monthly payments but higher total interest paid.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) start with a lower introductory interest rate, typically fixed for a period of 5, 7, or 10 years. After the introductory period, the interest rate can adjust periodically, usually once a year, based on a specified index. This can result in fluctuations in monthly mortgage payments.

The initial lower interest rate of ARMs can be attractive to borrowers who plan to sell their home or undertake a mortgage refinance before the introductory interest-rate period ends. However, it is important to carefully consider the potential for future interest rate increases and the impact they may have on monthly payments.

FHA Loans

Backed by the Federal Housing Administration, FHA loans are designed to make homeownership more accessible to borrowers with lower credit scores and smaller down payments. FHA loans typically have more flexible credit and income requirements compared to conventional loans, making them a good option for people who qualify as a first-time homebuyer or those with less-than-perfect credit.

The FHA insurance program reduces the risk to lenders by guaranteeing a portion of the loan amount. This allows lenders to offer FHA loans with more favorable terms, including lower down payments and more flexible credit requirements. FHA loans require both an upfront and monthly mortgage insurance premium (MIP), an additional cost which can be rolled into the borrower’s monthly payment. Even with this cost, an FHA loan can put homeownership within reach for many who could not otherwise qualify.

VA Loans

VA loans are offered by the U.S. Department of Veterans Affairs (VA) to eligible veterans, active-duty military personnel, Reserve and National Guard members, and surviving spouses. VA loans provide competitive interest rates and do not require a down payment, making them an attractive option for qualified borrowers.

The first step for anyone interested in a VA loan is to obtain a Certificate of Eligibility
from the VA.

USDA Loans

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. Provided by the U.S. Department of Agriculture (USDA), these loans are available to borrowers who fall below a defined income threshold. They offer competitive interest rates and do not require a down payment, making them an attractive option for eligible borrowers in rural communities. The USDA guarantees a portion of USDA loans, reducing the risk to lenders and allowing them to offer favorable terms to eligible borrowers.

Jumbo Loans

In most parts of the U.S., conventional mortgage loans have a cap of $806,500 in 2025 for a single-family home. This cap is set by the Federal Housing Finance Agency (FHFA) and is known as the conforming-loan limit. But sometimes buyers need to borrow more, and that’s where jumbo loans come in. These are also known as non-conforming loans.

Conforming loan levels are set by county, and most counties in Washington have the standard $806,500 limit. But in a few higher-priced housing markets, such as King County (Seattle), Pierce County (Tacoma), and Snohomish County, the limit is higher: $1,037,300.

Popular Places to Get a Mortgage in Washington

Securing a mortgage often depends on choosing the right location, where home prices are affordable and mortgage terms are favorable. Some areas in Washington offer more affordable housing options and a lower cost of living, making them an attractive place to purchase a home.

Least Expensive Locations

Here are some of the least expensive locations in Washington to get a mortgage, based on median home prices and cost of living data, benchmarks used in SoFi’s best affordable places in the U.S. guide. Remember, Washington is costlier than the U.S. average. The average home value in the state is $591,888:

•   Port Angeles: The overall cost of living here is 13% below the state average, and the average home value is $447,800.

•   Bellingham: This northern city has a below-average cost of living. The average home value here is $653,330.

•   Olympia: The average home price in this city with easy access to both forests and waterfront is $532,406. Its cost-of-living index is slightly below the state average.

•   Yakima: With an average home value of $347,826 and a very low cost-of-living index, this is one of the least expensive cities in the entire state.

•   Spokane: Its cost of living is 10% below average, and the median home value is $389,697.

Most Expensive Locations

As is often the case, large cities are on the pricier side when it comes to buying a home. Seattle, where the cost of living is the second highest in the state, has an average home value of $851,242 while Redmond, Bellevue, and Bainbridge Island all have home prices well north of $1 million.

Tips for Securing a Competitive Mortgage Rate in Washington

A competitive mortgage rate is crucial for saving money over the life of a loan. As noted above, even a small difference in interest rate can result in thousands of dollars in savings over the life of a mortgage. Here are some ways to securing a competitive mortgage rate in the current environment in Washington:

Compare Interest Rates and Fees

Take the time to compare interest rates and fees from multiple lenders. In addition to the interest rate, it is important to consider any upfront costs or closing fees associated with the loan. These fees can vary between lenders and can add to the overall cost of the mortgage.

Get Preapproved

Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property. Going through the mortgage preapproval process demonstrates to sellers that you are a serious and qualified buyer.

Washington Mortgage Resources

Washington offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. Some programs offer assistance with down payments and closing costs.

First-Time Homebuyer Programs

Washington state offers several programs to assist first-time homebuyers, including:

•   Washington State Housing Finance Commission (WSHFC) Covenant Homeownership Program is for eligible first-time homebuyers. Eligibility criteria include: The homebuyer or a parent/grandparent/great-grandparent must have lived in Washington state before April 1968 and be Black, Hispanic, Native American, Alaska Native, Native Hawaiian or other Pacific Islander*, Korean or Asian Indian.

•   Home Advantage and House Key Opportunity Programs also help homebuyers, who must take an education course to learn more about the homebuying process before working with the program loan officers.

•   USDA, FHA, and VA loans are also available in Washington State.

Down Payment Assistance

In addition to first-time homebuyer programs, Washington state also offers down payment assistance programs to help eligible borrowers:

•   WSHFC Down Payment Assistance Program down payment assistance is for homebuyers who use the agency’s Home Advantage or Opportunity programs. If your household income is under the program limits (up to $180,000), your credit score is at least 620, and you’re otherwise qualified for a home loan, you are probably eligible.

Tools & Calculators

The WSHFC website provides a variety of tools and calculators to help homebuyers estimate their monthly mortgage payments, determine their borrowing power, and compare different loan options.

Refinancing Options in Washington

The FHA Streamline Refinance allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle. For example, there is rarely the need for a new appraisal or full credit check.

VA loan holders may be eligible for an Interest-Rate Reduction Refinance Loan (IRRRL), which allows them to refinance their existing VA loan into a new loan with a lower interest rate without the need for a new appraisal or full credit check.

Recommended: The Cost of Living in the U.S.

Closing Costs, Taxes, and Fees in Washington

Buyers in Washington can expect to pay between 3%-6% of the home’s purchase price in closing costs.

The Takeaway

Mortgage rates in Washington are influenced by a variety of factors, including the Federal Reserve’s monetary policy and each homebuyer’s personal financial profile. Homebuyers should carefully consider their financial situation and the current mortgage rate environment before making a decision about whether or not to purchase a home. Fortunately, there are a number of resources available to help homebuyers in Washington get the best possible mortgage rate.

FAQ

What is a mortgage rate?

A mortgage rate is the interest rate that you pay on your mortgage loan. It is expressed as a percentage and is added to the principal amount of the loan to determine your monthly payments.

Will mortgage rates drop in Washington?

It is difficult to predict whether or not mortgage rates will drop in Washington. However, there are a number of factors that could affect mortgage rates, including unemployment, inflation, and the Federal Reserve’s monetary policy.

Will mortgage rates ever go back to normal?

It is difficult to say when or if mortgage rates will ever go back to normal because there isn’t really a “normal” rate. Current mortgage rates are due to a number of factors, each of which can change at any time.

Will Washington home prices ever drop?

It is difficult to predict whether or not Washington home prices will ever drop. However, there are a number of factors that could affect home prices, including the overall economy, the supply of homes on the market, and the demand for homes.

Is it a good time to buy a house in Washington?

Whether or not it is a good time to buy a house in Washington depends on your individual financial situation and goals. There are a number of factors to consider, including the current mortgage rate environment, the cost of homes in your desired area, and your long-term plans.

How do I lock in a mortgage rate?

You can lock in a mortgage rate by getting a mortgage rate lock from a lender. A mortgage rate lock guarantees that you will get a certain interest rate for a specified period of time. This can protect you from rising interest rates.

How do mortgage interest rates work?

Mortgage interest rates are determined by a number of factors, including the Federal Reserve’s monetary policy. When the economy is strong and inflation is low, mortgage rates tend to be lower. Conversely, when the economy is weak and inflation is high, mortgage rates tend to be higher.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
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.

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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