Compare mortgage rates in Oregon.

Introduction to Mortgage Interest Rates

Securing a mortgage is a crucial step in the homebuying process, and understanding mortgage interest rates is essential for making informed financial decisions. This is your comprehensive guide to mortgage rates in Oregon, including factors that influence rates, current trends, and available mortgage types.

Mortgage interest rates are calculated using a complex combination of factors that can be divided into two categories: the state of the economy and the borrower’s financial status. When the Fed’s interest rate is high, mortgage rates tend to be higher as well. And a higher credit score generally results in a lower interest rate, while a larger down payment can reduce the rate even further. Keep reading to learn more details.

Where Mortgage Rates Come From

The Federal Reserve, also known as the Fed, plays a central role in determining home loan rates. The Fed sets the short-term interest rates that banks use, which influences mortgage rates. When the Fed raises interest rates, it becomes more expensive for banks to borrow money, which leads to higher borrowing costs for consumers, including mortgage borrowers. Conversely, when the Fed lowers interest rates, borrowing becomes cheaper, potentially resulting in lower mortgage rates.

How Interest Rates Affect Home Affordability

Mortgage rates have a more significant impact on home affordability than many people realize. Even small interest rate changes can put homeownership out of reach for middle-income Americans. For instance, a one percentage point increase in interest rate on a $300,000 mortgage can add almost $200 to the monthly payment, making it harder to qualify for a loan or afford a home.

A seemingly small change in interest rate can also significantly affect the overall cost of the loan. In the scenario above, an increase in interest rate from 5.63% to 6.63% adds almost $70,000 to the overall cost of the loan. This underscores the importance of carefully considering interest rates when making home buying decisions.

Should Homebuyers Wait for Interest Rates to Drop?

Whether you’re buying your first home or a repeat homeowner, you may wonder if you’re better off buying now or waiting for interest rates to come down. While it’s true that rates fluctuate, there’s never a guarantee that they will drop when expected. Meanwhile, home prices tend to increase year over year, which could cancel out any interest rate savings.

If interest rates do drop in the future, homeowners can always take advantage of a mortgage refinance. Refinancing involves obtaining a new loan with a lower interest rate, which can reduce monthly payments and save money over the life of the loan. This flexibility allows homebuyers to take advantage of lower rates without necessarily delaying their home purchase.

Oregon Mortgage Rate Trends

Understanding historical mortgage rates can provide valuable insights into where rates are headed. While rates in Oregon have risen in recent years, they remain below historical highs. Indeed, they are currently around the 50-year average. (The FHFA stopped reporting state rates in 2018.) This perspective can provide context and reassurance to homebuyers considering a mortgage.

As you can see in the chart below, Oregon interest rates tend to be slightly lower than the national average. That’s good news for homebuyers looking in the Beaver State.

Historical Interest Rates in Oregon

Historical U.S. Mortgage Rates

It may also be helpful to take a look at historical U.S. mortgage rates. Over the past 50 years, rates have fluctuated significantly, reaching peaks in the late 1970s and early 1980s (up to 18.00%!) and experiencing lows in the early 2010s and during the height of the COVID-19 pandemic. Current rates are a relatively moderate level compared to past fluctuations.

Factors Affecting Mortgage Rates in Oregon

Numerous factors influence mortgage rates in Oregon and nationwide. Some of these factors are economic, as noted above, while others are entirely within the homebuyer’s control. Understanding these factors can help homebuyers make informed decisions and prepare for the mortgage process.

Economic factors include the Federal Reserve’s interest rates, inflation, and unemployment rates. Borrower-specific factors include credit score, down payment, income and assets, and the type of mortgage loan. By improving their credit score, increasing their down payment, and stabilizing their income and assets, homebuyers can potentially secure more favorable mortgage rates.

Economic Factors

Economic factors play a significant role in determining mortgage rates. Here are a few key factors that influence rates:

•   The Feds: The Federal Reserve’s federal funds rate serves as a benchmark for other interest rates, including mortgage rates. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, which can lead to higher mortgage rates. Conversely, when the Fed lowers the federal funds rate, borrowing becomes cheaper, potentially resulting in lower mortgage rates.

•   Inflation: Inflation, or the general increase in prices, affects mortgage rates. When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. To compensate for this, lenders may increase interest rates to maintain their profit margins. This relationship between inflation and mortgage rates is important to consider when making home-buying decisions.

•   Unemployment rate: The unemployment rate also plays a role in mortgage rate determination. A lower unemployment rate generally indicates 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. Conversely, a higher unemployment rate may result in lower mortgage rates as demand for housing decreases.

Consumer Factors

Pay close attention to this section, because it can help you lower your mortgage rate: Several consumer-specific factors influence mortgage rates. These factors can be managed by good financial habits.

•   Credit score: A higher credit score is a strong indicator of a borrower’s creditworthiness and financial responsibility. Lenders view borrowers with higher credit scores as less risky, which can lead to lower mortgage interest rates. Conversely, a lower credit score may result in a higher interest rate due to the perceived increased risk of default. Learn about the factors that affect your credit score.

•   Down payment: Increasing the down payment can positively impact the mortgage interest rate. A larger down payment reduces the loan amount, making the borrower less risky in the eyes of the lender. As a result, lenders may offer lower interest rates to borrowers who make larger down payments.

•   Income and assets: A steady income and sufficient assets are crucial factors in securing a favorable mortgage rate. Lenders assess a borrower’s income and assets to determine their ability to repay the loan. A stable employment history, a consistent income, and sufficient assets provide reassurance to lenders, potentially leading to lower interest rates.

•   Type of mortgage: The type of mortgage loan selected can also impact the interest rate. Adjustable-rate mortgages (ARMs) often have lower initial rates compared to fixed-rate mortgages, but the rates can fluctuate over time. Government-backed loans, such as VA mortgages, may offer lower rates due to their reduced risk profile. Additionally, shorter loan terms typically come with lower interest rates than longer terms.

Types of Mortgages Available in Oregon

Oregon offers a variety of mortgage types to meet the needs of different homebuyers. These include fixed-rate and adjustable-rate mortgages, government-backed loans (FHA, VA, and USDA loans), and jumbo loans for higher-priced properties. Each type of mortgage has its own characteristics, advantages, and disadvantages.

Conventional loans, which are not backed by government agencies, offer flexibility in terms of interest rates and loan amounts. They can be fixed-rate or adjustable-rate. Conventional loans are the most popular type of mortgage out there and usually require a credit score of at least 620.

Fixed-Rate Mortgage

A fixed-rate mortgage offers stability and predictability with an interest rate that remains constant throughout the life of the loan. This type of mortgage is ideal for borrowers who prefer consistent monthly payments and want to lock in a favorable rate. As the years pass and rents increase, your mortgage payment remains the same.

Fixed-rate mortgages come with loan terms ranging from 10 to 30 years. The choice of loan term depends on the borrower’s financial situation and preferences. Shorter loan terms generally have lower interest rates but higher monthly payments, while longer loan terms offer lower monthly payments but higher overall interest costs.

Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) offers a lower initial interest rate — sometimes called a teaser rate — that can adjust periodically based on market conditions. ARMs can be beneficial for borrowers who plan to sell or refinance their home before the initial fixed-rate period ends.

FHA Loan

In an April 2024 SoFi survey of 500 people intending to purchase a home, only 49% of homebuyers had heard of FHA loans. Backed by the Federal Housing Administration (FHA), FHA loans are designed to make homeownership more accessible for borrowers with less-than-perfect credit or smaller down payments.

FHA loans have more flexible credit and income requirements compared to conventional loans. Borrowers with credit scores of 580 or more may qualify with a down payment of 3.5% of the sales price or the appraised value, whichever is less. Buyers with a credit score range of 500 to 579 are required to put down 10%.

FHA loans do require an upfront mortgage insurance premium (MIP), a percentage of the base loan amount that can be rolled into the loan. Monthly MIP for new homebuyers is 0.15% to .75% — most often 0.55%.

VA Loans

VA loans are exclusively available to veterans, active-duty military members, certain members of the Reserve and National Guard, and eligible surviving spouses. These loans are backed by the U.S. Department of Veterans Affairs (VA) and offer competitive interest rates, no down payment requirement, and flexible credit guidelines.

A significant advantage of VA loans is the elimination of the down payment requirement. This feature makes homeownership more attainable for eligible veterans and military personnel, allowing them to purchase a home without having to save up first. The VA does not impose a minimum credit score requirement, although many lenders require a credit score of at least 620.

There’s no ongoing mortgage insurance as with a conventional mortgage, though you may be required to pay a one-time funding fee. A first-time VA loan borrower with a 0% down payment would pay a 2.15% funding fee.

USDA Loans

USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. Backed by the U.S. Department of Agriculture (USDA), these loans offer 100% financing, meaning no down payment is required.

The USDA does not set a firm credit score requirement; however, you are most likely to be approved if your score is in the 640 and higher range. You have to earn below a specific income limit and buy in certain areas. You may also purchase a property in need of repair.

Jumbo Loans

Jumbo loans are conventional loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loans are typically used to finance luxury homes or properties in high-cost areas.

Conventional mortgage loans have established limits on the loan amount, known as conforming loan limits. For 2026, the conforming loan limit for a single-family home is set at $832,750. Loans above this amount are considered jumbo loans.

Popular Places to Get a Mortgage in Oregon

Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are affordable. Here are a few popular places to get a mortgage in Oregon:

The cost of living varies significantly across different locations. The Cost of Living Index (COLI) provides a valuable tool for comparing the cost of living in different states. Index values above 100 indicate that the area is more expensive than the average cost of living in the U.S. Values below 100 mean that the area is more affordable than average.

Least Expensive Locations

Here are some of the least expensive locations in Oregon to get a mortgage, based on SoFi’s guide to the Best Affordable Places in the U.S., along with their COLI number the average home value.

•   Coos Bay COLI 91; average home value $330,070

•   Baker City COLI 86; $252,711

•   Hermiston COLI 92; $338,550

•   Dallas COLI 93; $459,702

•   Woodburn COLI 100; $414,000

Most Expensive Locations

On the other hand, here are some of the most expensive locations in Oregon to get a mortgage, along with the average home value:

•   Lake Oswego $897,421

•   West Linn $770,236

•   Happy Valley $690,807

•   Cannon Beach $904,085

•   Raleigh Hills $930,726

Recommended: What Are the Average Monthly Expenses for One Person?

Tips for Securing a Competitive Mortgage Rate in Oregon

As we’ve shown above, securing a competitive mortgage rate can save you thousands of dollars over the life of your loan. Here are a few tips to help you get the best possible rate:

Compare Interest Rates and Fees

Take the time to compare interest rates and fees from multiple lenders. It’s important to carefully evaluate not only the interest rate but also any associated fees, such as origination fees, appraisal fees, and closing costs. These fees can vary among lenders and can impact the overall cost of the mortgage. By being aware of all associated costs, homebuyers can make informed decisions and budget accordingly.

Get Preapproved

Getting preapproved for a mortgage offers several advantages. It demonstrates your seriousness as a buyer and provides you with a stronger negotiating position when making an offer on a property. Additionally, preapproval allows you to move swiftly in a competitive housing market, where quick action is often necessary to secure a desired property.

If you’re concerned about rising interest rates, you can lock in your rate for a certain period, typically ranging from 30 to 90 days, by paying a fee to the lender. This can provide peace of mind and protect you from potential rate increases during the lock-in period.

While mortgage prequalification can often be done quickly online, the mortgage preapproval process can take up to 10 days.

Oregon Mortgage Resources

Oregon offers various statewide and local resources to assist homebuyers, particularly first-time buyers and those with limited financial resources. These resources can provide valuable support and guidance throughout the homebuying process.

First-Time Homebuyer Programs

Oregon Housing and Community Services (OHCS) offers several programs specifically designed to help those who qualify as a first-time homebuyer overcome financial barriers and successfully purchase their first home. These programs provide various forms of assistance, including down payment assistance, low-interest loans, and educational resources.

The OHCS Bond Residential Loan Program offers a Cash Advantage option, which gives borrowers cash equal to 3% of their loan amount to help pay for home-buying expenses, exclusive of a down payment. The Rate Advantage option gives borrowers a lower interest-rate mortgage but no cash assistance.

Down Payment Assistance

Down payment assistance programs can significantly reduce the financial burden of purchasing a home.

After you open a First Time Home Buyer Savings Account, you can deduct any deposits or earnings — up to $5,000 each year — from your Oregon taxable income. Funds can be used for a down payment, closing costs, real estate agent fees, and more.

The Individual Development Account provides low-income Oregonians educational courses in budgeting and saving, and a dedicated savings account earmarked for a specific financial target. When you reach your goal, the state matches your money.

Tools & Calculators

There are many online tools and calculators available to help Oregon homebuyers estimate their monthly mortgage payments, compare interest rates, and determine their eligibility for various assistance programs. Some useful tools include:

Refinancing Options in Oregon

Refinancing a mortgage can be a strategic move to lower interest rates, reduce monthly payments, or access equity in your home. Oregon offers several refinancing options to help homeowners achieve their financial goals.

FHA Streamline Refinance

The FHA Streamline Refinance program offers a simplified and cost-effective way for FHA-insured homeowners to refinance their mortgages. This program allows homeowners to take advantage of lower interest rates without the need for a full appraisal or extensive documentation.

VA Interest Rate Reduction Refinance Loan (IRRRL)

VA Interest-Rate Reduction Refinance Loans (IRRRLs) provide an opportunity for VA loan holders to reduce their monthly payments by refinancing into a lower interest rate. This program is designed specifically for VA loans and offers streamlined processing.

Recommended: What Are the Average Monthly Expenses for One Person?

Closing Costs, Taxes, and Fees in Oregon

Closing costs, taxes, and fees are additional expenses associated with purchasing a home. In Oregon, buyers can expect to pay between 2% and 5% of the home’s purchase price in closing costs.

The specific closing costs associated with a home purchase in Oregon can vary depending on the property value and location. Higher-priced properties and locations with higher real estate activity may incur higher closing costs. Homebuyers should carefully review the closing disclosure provided by the lender to understand the exact costs involved in their transaction.

The Takeaway

Oregon’s mortgage landscape offers a range of options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in the Beaver State.

FAQ

Will mortgage rates drop in Oregon?

Predicting future mortgage rate movements is challenging due to the influence of various economic factors. However, by monitoring market trends and the actions of the Federal Reserve, homebuyers can stay informed and make educated decisions about their mortgage plans.

Will mortgage rates ever go back to normal?

“Normal” mortgage rates don’t really exist. However, long-term averages can provide a broader perspective on what constitutes a good mortgage rate.

Will Oregon home prices ever drop?

Real estate market trends are influenced by numerous factors, including supply and demand, economic conditions, and local market dynamics. Predicting future home price movements is complex and uncertain. Homebuyers should consult with real estate professionals and conduct thorough research to understand current market conditions and make informed decisions.

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

Determining the right time to buy a house involves personal financial considerations, housing market conditions, and individual preferences. There is no one-size-fits-all answer. Homebuyers should carefully assess their financial situation and seek professional advice to make an informed decision about whether it’s the right time to purchase a home in Oregon.

How to lock in a mortgage rate?

Locking in a mortgage rate involves paying a fee to the lender to secure a specific interest rate for a period ranging from 30 to 90 days. This can provide peace of mind and protect against potential rate increases during the lock-in period.

How do mortgage interest rates work?

Mortgage interest rates are determined by a combination of economic factors, including the Federal Reserve’s interest rates, inflation, unemployment rates, and borrower-specific factors such as credit score, down payment, income, and assets. 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.

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.

SOHL-Q324-092

Compare mortgage rates in Virginia.

Introduction to Mortgage Interest Rates

When it comes to securing a home loan, comparing interest rates is important to save money over the life of the loan. Even a slight difference in interest rate can result in significant savings — or added costs.

The interest rate charged on mortgages is a bit of a moving target — a reflection of the current economic climate and the borrower’s financial profile. Lenders assess numerous variables to determine the risk associated with lending money, and this directly influences the interest rate offered to borrowers.

Get ready for a deep dive into mortgage rates: how they’re set, historical trends, and tips for getting the lowest available rate.

Where Mortgage Rates Come From

Whether you’re buying your first home or a long-time real-estate enthusiast, few people know how mortgage rates come about.

The Federal Reserve, also known as the Fed, sets the short-term interest rates that banks use. While home loan rates are not directly tied to Fed rates, they tend to follow similar economic trends. When the Fed raises short-term rates, it often signals a tightening of the money supply, leading to higher borrowing costs across the board, including mortgages.

On the flip side, when the Fed lowers interest rates, it stimulates economic activity and makes borrowing more affordable, which can positively impact mortgage rates.

How Interest Rates Affect Home Affordability

Mortgage rates have a more significant impact on home affordability than many people realize. Even small changes in interest rates can make homeownership unattainable for middle-income Americans. For instance, a 1.00% increase in the interest rate on a $200,000 mortgage can add $130 to a monthly mortgage payment. This really adds up over the long term, with borrowers paying an additional $46,500 by the end of a 30-year mortgage.

This added expense can make it challenging for many families to afford a home — or achieve other long-term goals.

Should Homebuyers Wait for Interest Rates to Drop?

Many first-time homebuyers face the dilemma of whether to buy now or wait for interest rates to come down. While it’s tempting to wait for a more favorable interest rate environment, consider the opportunity cost of delaying homeownership. Waiting for rates to drop means missing out on potential home appreciation and the ability to build equity.

The decision of when to buy a home is a complex one, and the allure of waiting for lower interest rates is understandable. However, would-be homebuyers should weigh this against the potential drawbacks of delaying homeownership.

And don’t forget: Homeowners can always take advantage of a mortgage refinance after rates come down. (More on that below.)

Virginia Mortgage Rate Trends

Examining historical mortgage rate trends can offer valuable clues about future rate movements. While rates have risen in recent years, they remain below historical highs. In fact, current rates are hovering around the 50-year average. And as the table below shows, mortgage rates in Virginia run pretty close to the national average, sometimes reaching a bit higher or lower.

By analyzing past rate fluctuations, homeowners and prospective buyers can gain a better understanding of the cyclical nature of mortgage rates and make informed decisions about when to purchase a home or refinance their existing mortgage.

Historical U.S. Mortgage Rates

In the past 50 years, mortgage rates have fluctuated widely, from the peaks in the late 1970s and early 1980s of 18.00% to the valleys in the early 2010s and during the height of the COVID-19 pandemic of under 3.00%.

Factors Affecting Mortgage Rates in Virginia

Numerous factors influence mortgage rates in Virginia and nationwide. As we note above, some of these factors are economic, while others are entirely within the homebuyer’s control. Understanding these factors can empower homebuyers to make informed decisions and secure the best possible mortgage rate.

Economic Factors

Economic factors that impact mortgage rates include the Federal Reserve’s interest rate decisions, inflation, and unemployment rates.

•   The Feds: The Federal Reserve, as the central bank of the United States, exerts a profound influence on mortgage rates through its monetary policy decisions. The federal funds rate, which is the interest rate at which banks lend to each other overnight, serves as a benchmark for other interest rates, including those for mortgages. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, leading to higher mortgage rates. Conversely, when the Fed lowers the federal funds rate, borrowing costs decrease, making mortgages more affordable.

•   Inflation: Inflation, which refers to the sustained increase in the general price level of goods and services, has a direct impact on mortgage rates. As inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. To compensate for this loss of purchasing power, lenders may increase interest rates to maintain their profit margins. This relationship between inflation and mortgage rates underscores the importance of considering economic conditions when making home financing decisions.

•   Unemployment rate: The unemployment rate, which measures the percentage of the labor force that is unemployed, also plays a role in shaping mortgage rates. A low unemployment rate generally indicates a strong economy with a high demand for labor. This economic strength often translates into increased demand for housing, leading to higher home prices and, consequently, higher mortgage rates. Conversely, a high unemployment rate may lead to lower mortgage rates as lenders compete for a smaller pool of qualified borrowers.

Consumer Factors

In addition to economic factors, several consumer-specific factors influence mortgage rates. These include credit score, down payment, income and assets, and the type of mortgage loan.

•   Credit score: Your credit score is a numerical representation of your creditworthiness, based on your credit history and repayment behavior. Lenders use credit scores to assess the risk associated with lending money to a particular borrower. 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, which is the upfront payment made by the homebuyer toward the purchase of a property, also influences mortgage rates. A larger down payment reduces the amount of money that needs to be borrowed, making the loan less risky for the lender. As a result, borrowers who make a larger down payment often qualify for lower mortgage interest rates.

•   Income and assets: Lenders carefully evaluate a borrower’s income and assets when determining mortgage rates. A steady income demonstrates the borrower’s ability to make regular mortgage payments. Additionally, having a substantial amount of assets, such as investments or emergency savings, provides assurance to lenders that the borrower can meet their financial obligations even in challenging circumstances. Borrowers with strong income and asset profiles are often rewarded with lower mortgage interest rates.

•   Type of mortgage: The type of mortgage loan selected can also impact the mortgage rate. Adjustable-rate mortgages (ARMs), which offer lower initial rates that can adjust over time, may be attractive to borrowers who plan to sell their home before the fixed-rate period ends. Government-backed loans, such as VA mortgages for veterans and active-duty military members, often come with lower rates compared to conventional loans. Additionally, shorter loan terms, such as 15-year mortgages, typically have lower rates than longer loan terms like 30-year mortgages.

Types of Mortgages Available in Virginia

Virginia offers a variety of mortgage types to meet the needs of different homebuyers, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans. Each type of mortgage has its own unique characteristics, advantages, and disadvantages.

Conventional loans, which are not backed by a government agency, offer flexibility in terms of interest rate types and loan amounts. These loans typically require a credit score of 620 or higher.

Fixed-Rate Mortgage

Fixed-rate mortgages offer the security of a consistent interest rate throughout the life of the loan, ensuring that the principal and interest payments remain constant. This stability is particularly beneficial for homebuyers who prefer predictability and want to lock in a favorable rate for the long term.

Fixed-rate mortgages come with varying loan terms, typically ranging from 10 to 30 years. The choice of loan term significantly impacts the monthly mortgage payment and the total interest paid over the life of the loan. Shorter loan terms, such as 10 or 15 years, result in higher monthly payments but lower total interest paid. Conversely, longer loan terms, such as 20 or 30 years, offer lower monthly payments but result in higher total interest paid.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages (ARMs) initially offer a lower interest rate compared to fixed-rate loans, making them attractive to homebuyers seeking affordability in the short term. However, borrowers should be aware that the interest rate can adjust periodically, potentially leading to higher monthly payments in the future.

The initial low interest rate of ARMs can be a strategic choice for homebuyers who plan to sell their property before the fixed-rate period ends. This allows them to take advantage of the lower rate while they own the home and avoid the potential drawbacks of interest rate adjustments in the future.

FHA Loan

Backed by the Federal Housing Administration (FHA), FHA loans are designed to make homeownership more accessible to borrowers with limited financial resources. FHA loans typically have more lenient eligibility requirements and allow for lower credit scores and smaller down payments compared to conventional loans. FHA loans open up the possibility of homeownership to a broader segment of the population, making the dream of owning a home more attainable.

VA Loans

VA loans are exclusively available to veterans, active-duty military members, some Reserve and National Guard members, and their spouses. These loans are backed by the U.S. Department of Veterans Affairs (VA) and offer competitive interest rates, no down payment requirement, and less stringent credit requirements compared to conventional loans.

VA loans are a testament to the nation’s gratitude and support for those who have served or are currently serving in the military. One of the most significant advantages of VA loans is the elimination of the down payment requirement. This feature is particularly beneficial for veterans and military members who may not have substantial savings or may be transitioning to civilian life.

USDA Loans

USDA loans, provided by the U.S. Department of Agriculture (USDA), are designed to assist low-income borrowers in purchasing homes in rural areas. These loans offer competitive interest rates, no down payment requirement, and flexible credit guidelines, making homeownership attainable for those who may not qualify for conventional loans. By providing access to affordable financing, USDA loans aim to revitalize rural communities, promote economic development, and improve the quality of life for rural residents.

Jumbo Loans

Jumbo loans are designed for borrowers who need to finance homes that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. These loans typically come with higher interest rates and stricter credit requirements compared to conventional loans.

For a single-family home in Virginia, the conforming loan limit for 2026 is set at $832,750 for most counties. However, a handful of pricier counties have a higher limit of up to $1,249,125. Mortgages over those amounts require a jumbo loan.

Recommended: What to Know About the Mortgage Preapproval Process

Popular Places to Get a Mortgage in Virginia

Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are favorable. Virginia offers several cities and towns that meet these criteria, making them popular destinations for homebuyers.

Finding the ideal location to purchase a home involves careful consideration of various factors, including affordability, job opportunities, lifestyle preferences, and access to amenities. Virginia offers a diverse range of cities and towns that cater to different needs and budgets, making it an attractive state for homebuyers seeking a favorable mortgage environment.

The cost of living plays a crucial role in determining the affordability of a location. The Cost of Living Index (COLI) provides a valuable tool for comparing the cost of living in different states. By ranking all 50 states against the overall average cost of living in the U.S., the COLI helps homebuyers assess the financial viability of various locations and make informed decisions about where to purchase a home.

Least Expensive Locations

Cost of Living Index (COLI) figures under 100 indicate more affordable areas.

•   Danville COLI 69.2

•   Martinsville COLI 67.6

•   South Boston COLI 74.1

•   Emporia COLI 71.6

•   Franklin COLI 77.2

Most Expensive Locations

COLI numbers over 100 indicate areas where the average monthly expenses for one person or a family are higher than usual.

•   Mclean COLI 149.7

•   Arlington COLI 164.3

•   Vienna COLI 149.7

•   Falls Church COLI 177

•   Alexandria COLI 144.7

Recommended: Best Affordable Places to Live in the U.S.

Tips for Securing a Competitive Mortgage Rate in Virginia

A competitive mortgage rate can save borrowers tens of thousands of dollars over the life of a loan. By following these tips, homebuyers in Virginia can increase their chances of securing the best possible mortgage rate.

Compare Interest Rates and Fees

Shop around with multiple lenders before choosing a mortgage. Rates and fees vary significantly.

Grow Your Credit Score

FHA loans require a score of 580 with a low down payment, while a conventional loan will typically require at least 620, but requirements vary by lender.

Make a Larger Down Payment

Some lenders require a 20% down payment for their most competitive mortgage rates.

Lower Your DTI Ratio

Your debt-to-income ratio is the sum of your debt payments divided by your gross income. Lenders want a DTI no higher than 36%, but the lower the better.

Get Preapproved

Getting preapproved for a mortgage demonstrates your seriousness as a buyer and helps you lock in a competitive mortgage rate.

Purchase Points

Discount points are fees that borrowers can pay to reduce the interest rate on their mortgage. Each point costs 1% of the loan amount and can reduce the rate by .25%.

Virginia Mortgage Resources

Virginia offers several programs to assist first-time and repeat homebuyers with getting a mortgage or down payment and closing cost assistance.

Down Payment Assistance

Many down payment assistance programs are available from Virginia Housing. The Plus Second Mortgage pairs a mortgage loan with a second mortgage that borrowers can use to make their down payment. The second mortgage is 3% to 5% of the home’s purchase price. The Down Payment Assistance Grant provides homebuyers with up to 2.5% of the home’s purchase price for their down payment. And the Closing Cost Assistance Grant helps USDA and VA borrowers cover their out-of-pocket costs with a grant of 2% of the home’s purchase price. For eligibility and details, visit the Virginia Housing site

Tools & Calculators

Online tools and calculators can help you estimate your monthly mortgage payments, determine how much you can afford to borrow, and compare different mortgage options. These tools can be valuable resources when planning for a home purchase.

Refinancing Options in Virginia

Refinancing your mortgage can be a way to lower your interest rate, reduce your monthly payments, or access cash for other purposes. There are several refinancing options available in Virginia, including FHA Streamline Refinances, VA Interest-Rate Reduction Refinance Loans, and cash-out refinances.

Closing Costs, Taxes, and Fees in Virginia

Closing costs, taxes, and fees are associated with purchasing a home. These costs can vary depending on the property value, location, and lender. It’s essential to factor these costs into your budget when planning for a home purchase.

The Takeaway

Mortgage rates in Virginia are influenced by economic conditions, Federal Reserve policy, and market supply and demand. Homebuyers should carefully consider their financial situation, housing needs, and long-term plans when making decisions about purchasing a home and securing a mortgage. By comparing interest rates, fees, and available programs, homebuyers can increase their chances of securing a competitive mortgage rate in Virginia.

FAQ

What is a mortgage rate?

A mortgage rate is the interest rate charged by a lender on a mortgage loan. It determines the amount of interest paid over the life of the loan and directly impacts monthly mortgage payments.

Will mortgage rates drop in Virginia?

Predicting future mortgage rate movements is challenging. Various economic factors influence mortgage rates, and it is difficult to accurately forecast whether they will drop or rise.

Will mortgage rates ever go back to normal?

The definition of “normal” mortgage rates varies over time. Mortgage rates have fluctuated throughout history and are influenced by a multitude of economic factors. It is difficult to predict when or if rates will return to a specific level.

Will Virginia home prices ever drop?

Virginia’s housing market is influenced by various factors, including supply and demand, economic conditions, and population growth. Predicting future home price movements is complex and uncertain.

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

Determining the right time to buy a house involves considering personal financial circumstances, housing market conditions, and long-term goals. There is no one-size-fits-all answer, and it is advisable to consult with a real estate professional or financial advisor for personalized guidance.

How to lock in a mortgage rate?

Locking in a mortgage rate involves obtaining a commitment from a lender to secure the current interest rate for a specific period, typically 30 to 60 days. This protects borrowers from potential rate increases during the home-buying process.

How do mortgage interest rates work?

Mortgage interest rates are determined by various factors, including economic conditions, inflation, unemployment rates, and the Federal Reserve’s monetary policy. Lenders assess these factors to determine the level of risk associated with lending money and set mortgage 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.

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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