Jumbo loans can help you purchase a more expensive house in a high-demand location. A jumbo loan is a mortgage that lets you finance a home purchase that surpasses the limits of a conventional loan, as set by the Federal Housing Finance Agency. For 2023, the conventional loan limit for a mortgage is $726,200 in most counties across the US. The limit goes up to $766,550 in 2024. If you’re taking on a home loan that’s larger than this amount, you’ll need a jumbo loan.
Generally speaking, you need a higher credit score (usually 700 or above) and higher income (to ensure you can make payments) to qualify for a jumbo loan. Also called nonconforming loans, since they don’t conform to FHFA limits, jumbo loans typically require a larger down payment.
What are jumbo mortgage rates?
Historically, jumbo mortgage rates have tended to be higher than conventional mortgage rates, since you’re borrowing a larger amount. Currently, in today’s high-rate environment, jumbo loans are trending closer to or even below conventional home loan rates. The national average for a 30-year fixed-interest rate for a jumbo loan is currently 7.47%, compared to the national average for a 30-year fixed-rate mortgage, which is at 7.42%, as of Dec. 7, 2023.
Current jumbo mortgage rate trends
While mortgage rates fluctuate daily, mortgage interest rates have surged consistently since the Federal Reserve began to increase interest rates in early 2022. Recent dips in home loan rates signal that the cost of borrowing could begin to stabilize in the coming months.
Jumbo loan interest rates typically follow the same trend as conforming mortgage rates -- and are impacted by the same macroeconomic conditions.
How to get a jumbo mortgage
Credit requirements are stricter for jumbo mortgages since they are larger loans that require bigger down payments. You typically need a minimum credit score of 700 to qualify for a jumbo loan, although the required score varies by lender -- some lenders will accept a score as low as 660.
You should also be prepared for a larger down payment with a jumbo loan: The minimum down payment requirement for a jumbo loan is 10%, compared with 3% for a conventional mortgage. In order to qualify for a jumbo loan, you need to have your financial documents ready to be evaluated by a lender.
- Have your finances in order: Gather financial documents like your W-2, pay stubs and bank statements for proof of income to show lenders you can afford the loan.
- Get prequalified: In order for a seller to take your offer seriously, you have to verify your creditworthiness by going through the prequalification process (or the preapproval process, which is a step further and is subject to a hard credit check and review of your financial records).
- Have a strong credit score: Pay off high-interest debt like credit card debt to raise your credit score, and make sure your debt-to-income ratio is low overall.
- Assemble a 10% down payment: At a minimum, you will be required to put down 10% for a jumbo loan.
Current mortgage rates
| Product | Interest rate | APR |
|---|---|---|
| 30-year fixed-rate | 7.29% | 7.34% |
| 15-year fixed-rate | 6.74% | 6.82% |
| 30-year fixed-rate jumbo | 7.38% | 7.44% |
| 30-year fixed-rate FHA | 7.13% | 7.18% |
| 5/1 ARM | 6.68% | 7.92% |
| 5/1 ARM jumbo | 6.52% | 7.81% |
| 7/1 ARM | 6.78% | 8.00% |
| 10/1 ARM | 7.03% | 7.98% |
| 15-year fixed-rate jumbo | 6.97% | 7.05% |
| 20-year fixed-rate | 7.15% | 7.21% |
| 30-year fixed-rate VA | 7.28% | 7.32% |
| 1-year ARM jumbo | 6.88% | 7.93% |
| 3/1 ARM jumbo | 6.25% | 7.73% |
| 7/1 ARM jumbo | 6.63% | 7.81% |
| 15-year fixed-rate refinance | 6.77% | 6.85% |
| 30-year fixed-rate refinance | 7.30% | 7.34% |
| 5/1 ARM refinance | 6.56% | 7.83% |
| 7/1 ARM refinance | 6.69% | 7.88% |
| 10/1 ARM refinance | 7.03% | 7.97% |
| 30-year fixed-rate jumbo refinance | 7.39% | 7.44% |
| 15-year fixed-rate jumbo refinance | 7.06% | 7.14% |
| 5/1 ARM jumbo refinance | 6.45% | 7.79% |
| 30-year fixed-rate FHA refinance | 7.19% | 7.24% |
| 20-year fixed-rate refinance | 7.16% | 7.22% |
| 30-year fixed-rate VA refinance | 7.77% | 7.80% |
| 7/1 ARM jumbo refinance | 6.63% | 7.81% |
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.
Why should you compare jumbo mortgage rates?
Just as with any mortgage, shopping around with different lenders will help you secure the lowest rate possible. Comparing interest rates and fees between lenders allows you to see what the true cost of your loan will be. Getting quotes from numerous lenders will save you money: Interviewing just one additional lender can save you on average $1,500 over the lifetime of your loan, and speaking with five lenders can save you $3,000 on average over the course of your mortgage, according to Freddie Mac.
How to compare jumbo rates
Getting a sampling of rates for any type of loan is important, and you may see a range of offers from banks, credit unions and online institutions. Make sure that you’re comparing apples to apples, however. Some lenders will use an annual percentage rate, or APR, and others may use an interest rate. Though related, they are different things: An APR provides a more complete snapshot of the costs associated with procuring a loan.
Who should get a jumbo mortgage?
A jumbo mortgage could make sense if you satisfy one of the following requirements:
- You’re in an area with a high cost of living: Jumbo loans are prevalent in virtually every county in the US because it’s simply based on the size of your loan. However, big cities and areas along the coasts can be particularly expensive and buying a home in one of those places could require a jumbo mortgage.
- You have great credit: For a lender, a jumbo mortgage is a bigger risk compared to other types of mortgages, given that you’re borrowing a larger amount of money. As such, it’s essential to have a strong credit score as part of your application.
- You don’t have sufficient cash on hand: People typically take out a mortgage because they don’t have enough cash to pay for a house out of pocket. A jumbo loan allows you to finance a more expensive home where you want to live.
How to get a jumbo mortgage
1. Check your credit. Your credit score is a significant factor in landing a jumbo loan because you’re borrowing a large sum. Typically, an applicant would need a credit score of at least 700 to qualify, though specific score requirements vary by lender. Some lenders may accept a slightly lower score in certain situations.
2. Prepare your down payment. The minimum down payment for a jumbo loan is 10% of the total cost of the home. That’s significantly higher than a conventional mortgage, which usually requires a 3% down payment.
3. Organize your documents. Any lender will want access to your bank statements, tax documents, pay stubs and other financial documents.
4. Get preapproved. A mortgage preapproval will provide more information about how much home you can afford. It also signals to sellers that you’re serious about making an offer.
5. Find your home. With a preapproval in hand, you can start shopping for a home in earnest.
FAQs
You should consider a jumbo mortgage if you need a loan larger than the FHFA limit for your area. In regions where housing prices are sky-high, the limits for a jumbo loan tend to be higher than lower-cost living areas.
Overall, a loan is considered a jumbo loan if it exceeds $726,000 in 2023 or $766,550 in 2024. However, in more expensive counties in California and New York, the limit before having to apply for a jumbo loan is above $1,000,000.
Jumbo loans require a higher minimum credit score than conventional loans. The minimum credit score for jumbo loans is usually around 680, though some lenders will accept 660, whereas a typical minimum credit score for a conforming 30-year loan is usually 620.
There are fixed-rate jumbo loans as well as adjustable-rate jumbo mortgages. Typically fixed-rate jumbo loans are offered in 15-year and 30-year terms, although it varies depending on the type of jumbo loan you take out. ARMs, for example, usually come in five-, seven- or 10-year terms. You can also refinance a jumbo loan, with a standard rate and term refinance or a cash-out refinance just like conventional loans.
Jumbo rates are set just like traditional rates, based in part on the rates set by the Federal Reserve and macroeconomic conditions. But your financial situation, including your credit score and income, will be a key factor in determining your specific rate.
More mortgage tools and resources
You can use CNET’s mortgage calculator to help you determine how much house you can afford. The CNET mortgage calculator factors in variables like the size of your down payment, home price and interest rate to help you figure out how large of mortgage you may be able to afford. Using the CNET mortgage calculator can also help you understand how much of a difference even a slight increase in rates makes in how much interest you’ll pay over the lifetime of your loan.
