Today’s Massachusetts Mortgage Rates: What to Know Before Making a Massachusetts Home Purchase

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Buying a home in the Bay State can get pretty expensive. The median price of a single-family home in Massachusetts is $629,000, which is 43% higher than the national median of $440,300, and closing fees can cost nearly $8,000. But home prices vary widely across the state, so you may find a deal in smaller areas. Here’s what to know about mortgage rates, home prices, and down payment assistance in Massachusetts. 

What Are Today’s Mortgage Rates in Massachusetts?

For Monday, September 26, 2022, here are the current mortgage rates in Massachusetts. The average 30-year fixed mortgage rate is 6.290%. The average 30-year fixed mortgage refinance rate is 6.370%. Today, the average 15-year fixed mortgage rate is 5.480%.

For variable rate loans, the average 5/1 adjustable-rate mortgage (ARM) rate is 4.000%. 

This information is from Bankrate’s latest survey of the nation’s largest mortgage lenders.

Current Mortgage Rates in Massachusetts

Loan TypeRate
30-year Fixed6.290%
15-year Fixed5.480%
5/1 ARM4.000%
30-Year Refi6.370%

How Much of a Mortgage Do You Need to Buy a Home in Massachusetts?

High prices make it harder to save for a down payment, which is money you commit toward the home purchase upfront. Conventional loans require a down payment of at least 3% of the home’s purchase price, which works out to $18,870 on a median-priced home in Massachusetts. FHA loans require either 3.5% or 10% down, depending on your credit score, and you might not need a down payment at all for some mortgage programs such as VA loans and USDA loans.  

Some good news: “We’re certainly seeing a reduction in the higher-priced homes,” says Matthew Ricci, a home loan specialist with Churchill Mortgage. “Anything over $650,000 or $750,000 is starting to have a decent reduction in a lot of the areas outside of Boston or even southeastern Massachusetts.” 

That’s because demand for high-price homes generally dips, Ricci says, when the stock market is shaky and interest rates are high. 

The table below shows how much a down payment might cost in different metro areas in Massachusetts.

Metro AreaMedian Home Price3.5%10%20%
Boston – Cambridge – Newton$639,000$22,365$63,900$127,800
Worcester$373,200$13,062$37,320$74,640
Springfield$288,300$10,090.50$28,830$57,660
Pittsfield$303,700$10,629.50$30,370$60,740
Barnstable Town$650,600$22,771$65,060$130,120
Source: National Association of Realtors (NAR) data for Q1 2022

Types of Home Loans Available in Massachusetts 

Most homebuyers in Massachusetts choose a home loan from the major mortgage programs: FHA loans, VA loans, and conventional loans. Some lenders also offer customized home loans geared toward people in certain professions or income brackets, so it’s worth asking about these when comparing lenders. A loan officer can walk you through the choices, Ricci says.

“A big part of our initial call with clients is readiness assessment,” Ricci says “We’ll help buyers determine if it’s time to buy a home in the market. A lot of that is based on their ability to pay off their mortgage loan.” He says borrowers may qualify to borrow a certain amount, but he’ll help them figure out how that impacts their monthly budget.  

Here’s what to know about the major mortgage programs in Massachusetts.

Conventional loans

Conventional loans are mortgages that aren’t backed by any government agency. They’re the most popular type of home loan, accounting for 78.5% of new home sales nationwide in the first quarter of 2022, according to data from the National Association of Home Builders. To qualify for a conventional loan, borrowers need a down payment of at least 3%, a credit score of at least 620, and a maximum debt-to-income ratio of 45% in most cases. Borrowers also pay monthly private mortgage insurance if their down payment is under 20%, but PMI can eventually be dropped.  

FHA loans

Nationwide, FHA loans accounted for 8% of new home sales during the first quarter of 2022. These mortgages are backed by the Federal Housing Administration (FHA), so they have looser qualification requirements compared to conventional loans. Homebuyers need a credit score of 580 and down payment of at least 3.5% or a credit score of 500 and minimum down payment of 10%. The buyer’s DTI ratio can be up to 50%. These loans come with both upfront and monthly mortgage insurance, which can make them more expensive than conventional loans over time. 

VA loans

Almost 5% of new home loans closed in the beginning of 2022 were VA loans, which are mortgages insured by the U.S. Department of Veterans Affairs. These are available to service members, veterans, and surviving spouses, who won’t have to pay a down payment or mortgage insurance. However, borrowers must meet the lender’s specific credit score and DTI limits. They’ll also pay a funding fee equal to 1.4% to 2.3% of the loan amount, but some borrowers are exempt from paying the fee.

First Time Homebuyer Programs in Massachusetts

First-time homebuyer programs provide buyers with money to cover some of the costs of buying a home, such as the down payment, closing costs, and principal reduction. To use one of these programs, you’ll have to find a lender that accepts homebuyer assistance. A loan officer can help you figure out which program is best for you and whether you meet the specific eligibility requirements. Assistance programs usually offer grants, which don’t have to be repaid, or repayable second mortgages with affordable terms. Some programs may even help buyers who aren’t entirely new to homeownership.

Massachusetts offers many homebuyer assistance programs, both on the local and state level. 

Pro Tip

There are many programs that help homebuyers cover the down payment or closing costs. Some don’t have to be repaid if you follow guidelines. Ask your lender about these programs when you start comparing loans.

MassHousing

MassHousing is a not-for-profit agency that has provided more than $27 billion in housing assistance across Massachusetts since 1966. MassHousing’s programs include:

  • Down payment assistance of 10% of a home’s purchase price. It’s available in every city and town in Massachusetts, and depending on where the home is purchased, you may receive up to $30,000 or $50,000. The assistance can often be combined with other community down payment loans. 
  • MI Plus, which is mortgage insurance that helps pay your mortgage for up to six months if you lose your job. The benefit comes at no additional cost on loans insured by MassHousing. 
  • MassHousing mortgage loans with low fixed interest rates, flexible income and credit requirements, and down payment assistance.

Massachusetts Housing Partnership

The Massachusetts Housing Partnership is another statewide agency that facilitates housing programs and promotes racial equity in the affordable housing system. Through participating lenders, the agency’s ONE Mortgage Program comes with a 3% down payment, a low fixed interest rate, and no private mortgage insurance.

Local programs

The city of Boston provides financial assistance to homebuyers who meet eligibility requirements. Some of the options include a deferred payment loan toward a down payment, a mortgage with a heavily discounted interest rate and closing cost assistance, and a matched-savings program for first-generation homebuyers. 

Among some of the other large cities in Massachusetts, Worcester offers down payment assistance of up to $5,000 while Springfield homebuyers can receive up to $4,000 to cover upfront costs. Buyers in Cambridge may be eligible for assistance of up to 6% of the home’s purchase price.