Compare current Jumbo mortgage rates

National average mortgage interest rates

Rate data is based on a borrower with good credit, a qualifying loan amount (at least $200,000 but less than the national qualifying loan amount) and a loan-to-value ratio of less than 80% (for purchase loans, this equates to a 20% down payment and more). © Zillow, Inc., 2006-2016. Use is subject to conditions of use

US News Expert Insights

“Mortgage rates continue to fall along with the 10-year Treasury yield, which fell earlier this week after the October jobs report. The hiring slowdown reflects a cooling labor market, and that’s good news for Federal Reserve policymakers tasked with bringing inflation back to its 2% annual target. It’s also welcome news for homebuyers, who could see lower mortgage rates if the Fed cuts rates earlier than expected in 2024.

“That being said, it’s hard to predict when mortgage interest rates will fall further, and the typical rate for a 30-year fixed mortgage is already at its lowest point in about four months. Those willing to buy a home during the hectic holiday season will be blessed with lower financing costs and less competition from fewer buyers. The main downside to buying a holiday home is that you’ll spend a lot less time meeting your family – and a lot more time on the phone with your estate agent.”

Erika GiovanettiUS loan specialist

Average mortgage rates, daily

Product
Interest rate
APR

30 years solid

6,666%

6,746%

15 years fixed

5,808%

5,941%

10 years fixed

5,624%

5.82%

5 years ARM

7.103%

7,926%

3 years ARM

6.125%

7.204%

Jumbo

6,625%

6,695%

VA

5,681%

6.06%

FHA

5,617%

6,421%

Updated: 13/12/2023

Rate data is based on a borrower with good credit, a qualifying loan amount (at least $200,000 but less than the national qualifying loan amount) and a loan-to-value ratio of less than 80% (for purchase loans, this equates to a 20% down payment and more). © Zillow, Inc., 2006-2016. Use is subject to conditions of use

AND jumbo mortgage is a home loan that exceeds the conforming limits established by the Federal Housing Finance Agency. The FHFA oversees Fannie Mae and Freddie Mac, which buy and sell qualifying home loans in the secondary market.

“Jumbo mortgages don’t sell to Fannie or Freddie,” says Melissa Cohn, regional vice president of William Raveis Mortgage. “A lot of them are portfolio loans, which means banks keep them on their balance sheets.”

Since lenders tend to have these mortgages and borrowers are more likely to default on larger balances, large loans are riskier for lenders.

“Let’s say you have a giant loan of $2 million versus 10 matching loans of $200,000 each,” says Cohn. “If one of those 10 compliant loans goes bad, you still have nine that are working. If one big loan goes wrong, everything goes down.”

To reduce risk, lenders are setting higher qualification standards for jumbo mortgages. In general, you’ll need a higher credit score, a higher down payment, and a lower down payment debt to income, DTI, ratio get a jumbo loan.

Classic loans generally refer to mortgages that meet the conforming guidelines, while jumbo loans exceed the conforming limits.

The best mortgage for you it depends on what you are eligible for and the amount you need to borrow. Here are some of the main differences between jumbo and conventional mortgages:

  • Loan size. In 2023, any mortgage that is under $726,200 is a qualifying home equity loan. In some high-cost areas, qualifying loans can be as high as $1,089,300. Loans that exceed these limits are considered jumbo, and each lender sets its own ceiling. Some may offer large loans of around $2 million or $3 million, while others go up to $5 million or more.
  • Qualifications. To qualify for a jumbo mortgage, you’ll often need a credit score of 700 or higher and a down payment of around 10% to 20%. These are much stricter requirements than a conforming loan, where you can qualify with a credit score of 620 and a 3% down payment. Lenders also like to see a DTI ratio of no more than 43% when you get a jumbo mortgage, compared to a maximum of 50% for a conforming loan.
  • Cash reserve requirements. Some mortgages require borrowers to have cash reserves on hand to protect against unexpected financial crises. The exact amount you’ll need depends on the type of mortgage, the lender, your credit score and other personal factors. For giant loans, “requirements start at 12 months and depending on the size of the loan, it can be up to 24 or 36 months,” says Cohn. With a qualifying loan, you only need cash reserves in some cases, with a maximum requirement of 12 months.
  • Subscription. Most jumbo loans are underwritten by hand, which means your application will be reviewed by a professional to decide if you qualify for the loan. Regular loan applications, on the other hand, usually go through an automated underwriting system. A manual process can benefit you because you’ll be able to explain anything unique about your finances.

Interest rates on Jumbo loans are usually higher than those on conforming loans, but may occasionally drop below conforming rates. It varies with each financial institution.

When determining jumbo loan rates, the lender first looks at the cost of funds, which is the interest rate you pay when you borrow from another bank. The lender then adds its own margin to the cost of funds.

“When you add the cost of funds to the margin, you get a giant mortgage rate,” says Ray Rodriguez, regional mortgage sales manager at TD Bank. “Rates vary because each bank may have a different risk appetite and profitability model. It all depends on the specific creditor.”

The fixed terms of a jumbo loan can vary from 10 to 30 years. Some lenders offer other options, such as adjustable-rate mortgages or ARMs. AND 5/1 ARM, for example, starts with a low interest rate for the first five years. During this time, “the mortgage walks, talks, acts and feels like a 30-year fixed-rate loan,” says Cohn.

After the end of the fixation, the rate can change at set intervals for the remaining duration of the loan. Cohn says borrowers often choose ARMs when market rates are high. Later, they are usually refinanced to a fixed rate, which provides predictable payments.

To calculate the interest rate of a jumbo loan, contact the lender and ask for a quote. You will need to provide details of your credit, income, outstanding debts, estimated loan amount and deposit.

The lender can provide a quote and estimate your monthly payment. If you already have a quote, you can use a mortgage calculator to estimate your monthly payment. This can help you determine if a jumbo loan fits into your budget.

Comparing loan rates is one of the best ways to reduce the cost of buying a home. “Jumbo mortgage rates can vary widely from bank to bank,” says Cohn, because lenders have more leeway in setting loan terms.

Even a small difference in rate can result in significant savings, especially on a high-dollar loan. Let’s say you take out a 30-year fixed-rate jumbo mortgage for $1 million and put 20% down. You save $134 per month with an interest rate of 6.75% versus 7%. And you’d save more than $48,000 over the life of the loan.

To compare rates, start by contacting several banks and credit unions and ask yourself these questions:

  • Do you offer jumbo loans? If the financial institution does not provide the type of loan you are looking for, jump to the next lender.
  • How much can I borrow? You will need to know if the lender’s upper jumbo limit is high enough to cover the home you want to buy.
  • What rate can you give me? You will need to provide details of your finances and agree to a credit check for a tailored quote.
  • Can you do better? Once you have a few offers in hand, use them to negotiate. One lender may be willing to beat the lowest rate offer, which can save you money.

A jumbo loan could be a good idea if you are buying a house with a high value and higher monthly payments will not strain your finances. Check first compliant credit limits for the region where you are looking for homes. Credit limits may vary by county and number of units in the property. If the price of the home you are buying is more than the corresponding limit in your county, you will need to take out a jumbo loan.

The credit limit applies to the amount you borrow – not necessarily the sale price of the home. Let’s say the loan limit in your area is $726,200 and you’re buying a one-unit property for $800,000. With a 20% down payment of $160,000, you’re only borrowing $640,000 from the lender.

In this scenario, you can apply for a conforming loan. It’s generally easier to qualify for a conforming loan, so that can work in your favor.

Jumbo mortgage rates are typically 0.25 to 1 percentage point higher than rates on matching loans. So a good jumbo mortgage rate is generally one that is close to or better than the average matching rate.

The best mortgage rates usually go to borrowers with excellent credit, low DTI ratio and large backup. If you are not happy with the quote you have received, ask the lender for advice. Lowering your rate can be a matter of improving your credit score or increasing your down payment by a certain amount. You can also shop around several banks and credit unions to find a lender that offers better rates.

The main advantage of a jumbo loan is that it can help you buy a house at a high price. The underwriting process also allows for more flexibility as large loans are often manually underwritten. However, the major disadvantage is the qualification requirements. Jumbo loans require higher credit scores, larger down payments, lower DTI ratios and larger cash reserves compared to other types of mortgages. “With stricter eligibility requirements, someone can qualify for a conforming loan, but not for a jumbo mortgage,” Rodriguez says.

Mortgage rates by mortgage type