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Terms and Phrases that may be used in this Mortgage Rate Table
Upfront costs: The upfront costs are charged for originating the loan. These costs are commonly labeled as Origination, Application, Processing, Underwriting, or Administration fees. The upfront costs may not include all costs associated with securing your mortgage. Please visit the Consumer Financial Protection Bureau’s website or consult a loan officer or broker for more information.
Points: Points are fees paid directly to the lender in exchange for a reduced interest rate. A point is equal to 1% of the borrowed funds. By paying points, you save money on interest over your mortgage’s term.
5-year cost: This is an estimated amount you’ll pay in interest and costs, such as the upfront costs and points, for the identified time. The estimated amount does not include principal payments or other costs, such as taxes, insurance, or private mortgage insurance. Your actual loan terms, such as the rate, annual percentage rate, monthly payment, and upfront costs, may be different because of other factors, such as your credit score, income, and employment history.
Calculate your monthly payment:
Principal: The face value of a loan, independent of the interest charged on the loan amount.
Interest: Payments made to a lender by a borrower in exchange for a loan.
Property Tax: Any tax on real estate or certain other forms of property.
Private mortgage insurance (PMI): An insurance policy that compensates lenders for losses from a mortgage loan default.
Homeowner association (HOA): A private association formed by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision.
One-time fees breakdown: These fees are estimates of the fees charged by the lender for processing, approving and funding a loan.
What Are Today’s Jumbo Mortgage Rates?
On Saturday, January 16, 2021 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year jumbo mortgage rate is 2.930% with an APR of 3.050%. The average 15-year jumbo mortgage rate is 2.400% with an APR of 2.460%.
Current Jumbo Mortgage Rates
|30-Year Fixed Rate||2.930%||3.150%|
|30-Year FHA Rate||2.560%||3.430%|
|30-Year VA Rate||2.850%||3.090%|
|30-Year Fixed Jumbo Rate||2.960%||3.030%|
|20-Year Fixed Rate||2.870%||3.140%|
|15-Year Fixed Rate||2.420%||2.650%|
|15-Year Fixed Jumbo Rate||2.430%||2.490%|
|5/1 ARM Rate||3.060%||4.050%|
|5/1 ARM Jumbo Rate||3.050%||4.020%|
|7/1 ARM Rate||2.970%||3.970%|
|7/1 ARM Jumbo Rate||3.070%||3.960%|
|10/1 ARM Rate||3.240%||4.020%|
|30-Year Fixed Rate||2.890%||3.190%|
|30-Year FHA Rate||2.640%||3.510%|
|30-Year VA Rate||3.130%||3.400%|
|30-Year Fixed Jumbo Rate||2.930%||3.050%|
|20-Year Fixed Rate||2.780%||3.100%|
|15-Year Fixed Rate||2.370%||2.710%|
|15-Year Fixed Jumbo Rate||2.400%||2.460%|
|5/1 ARM Rate||2.990%||3.990%|
|5/1 ARM Jumbo Rate||2.980%||3.930%|
|7/1 ARM Rate||2.900%||3.870%|
|7/1 ARM Jumbo Rate||2.990%||3.840%|
|10/1 ARM Rate||3.080%||3.930%|
Rates as of Saturday, January 16, 2021
What Is a Jumbo Loan?
A jumbo loan is any mortgage that is larger than the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because jumbo loans exceed the conforming loan limits, they are often referred to as non-conforming loans. The federal government won’t insure or service jumbo mortgages, so mortgages backed by the Federal Housing Administration (i.e., FHA loans) need to meet the conforming loan limits.
Also, the federally backed mortgage companies Fannie Mae and Freddie Mac won’t service or guarantee these loans. Since lenders can’t sell jumbo loans to Fannie or Freddie, they’re viewed as more risky mortgages and usually have higher interest rates.
Jumbo Loan Requirements
The baseline FHFA conforming loan limit for 2021 is $548,250 for single-unit homes. In certain high-cost areas, that limit increases to a maximum of $822,375. The loan limit varies by county and you can see the limit for your area using the FHFA’s conforming loan limits map.
The conforming loan limits for multi-unit properties are higher and top out at $1,472,550 for 4-unit properties located in high-cost areas. Any property with more than four units is considered a commercial property and requires a commercial mortgage.
Jumbo Loan Qualifications
Qualifying for a jumbo loan is more difficult than getting a conventional mortgage. The specific jumbo loan lending guidelines vary by lender, but you’ll need a bigger down payment, and much higher credit score.
With a typical conventional mortgage you may be able to qualify with a credit score of 650 or higher. That’s not the case with jumbo loans, where a minimum credit score of 700+ typically is required. Some conventional loans allow you to purchase a home with only 3% down. But a standard down payment for a jumbo loan starts at 10% and can be as much as 40% of the purchase price.
15-Year vs. 30-Year Jumbo Loans
Shorter term, 15-year mortgages typically have lower interest rates, and because you’re paying off the loan sooner, you’ll pay much less interest overall. For 30-year repayment terms, you’ll have much lower monthly payments. So you’ll be able to save or invest more in the short term, but you’ll have a mortgage payment for an extra 15 years.
By definition, jumbo loans are for much larger amounts, and that means that the differences between a 15-year and 30-year loan are much more pronounced. As you can see, a 15-year loan could cost you over $1,700 a month more but save you more than $220,000 over the life of the loan:
|Loan Term||Loan Amount||Interest Rate||Monthly Payment||Total Loan Cost|
How Is the Mortgage Process Different With a Jumbo Loan?
The steps you’ll take to qualify for a jumbo loan are similar to what you’d go through for other types of mortgages. You’ll need to go through a credit check, verify your income, and have the property appraised. But because the bank is issuing a much larger loan, the lending guidelines will be more strict.
Along with needing more income to cover the larger monthly payment, you may need cash reserves to cover 12 to 18 months of payments. When you add in the down payment and closing costs, it wouldn’t be unreasonable for a jumbo loan to require the borrower to have well over $100,000 in cash to qualify for the loan.
How to Find the Best Jumbo Mortgage Rates
Finding the best jumbo mortgage rates is a matter of shopping for the best lender. However, not all lenders offer jumbo loans. And because of the COVID-19 pandemic, fewer lenders are offering them. So you may have to do more research to compare rates and find the best deal.
Finding the lowest possible rate for a jumbo mortgage can save you more compared to conventional loans because these loans are so large. On a $700,000 30-year loan, just a 0.12% interest rate reduction would save you roughly $45 a month and $16,000 over the life of the loan.
When you compare rates also pay attention to discount points the lender may have built into the rate. A discount point is an upfront fee of 1% charged in exchange for a lower rate. For jumbo loans these fees can end up being quite expensive. Although the savings can outweigh the extra expense over the long haul, you’ll want to know what fees you’re paying, so you can see if it makes sense for your situation.