Today’s Ohio Mortgage Rates: What to Know Before Making an Ohio Home Purchase

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The average home price in Ohio—which was $281,176 in June 2022—is well below the national average existing-home sales price of $416,000. But prices vary in every market. For instance, sales prices dropped in Dayton, Akron and Cleveland from late 2021 to early 2022.

“In Akron and Cleveland, it seems rising unemployment numbers mixed with inflation have cooled these markets some,” says Ron Manton, a home loan specialist with Churchill Mortgage. “Though overall, 12 of the 15 Ohio markets have experienced an increase in average price over the last year.”

If you’re looking to get a mortgage in the Buckeye State, here’s what to know about mortgage programs, tax credits, down payment assistance and how much you might need to pay upfront. 

What Are Today’s Mortgage Rates in Ohio?

For Wednesday, October 05, 2022, here are the current mortgage rates in Ohio. The average 30-year fixed mortgage rate is 6.880%. The average 30-year fixed mortgage refinance rate is 6.870%. Today, the average 15-year fixed mortgage rate is 6.060%.

For variable rate loans, the average 5/1 adjustable-rate mortgage (ARM) rate is 5.940%. 

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

Current Mortgage Rates in Ohio

Loan TypeRate
30-year Fixed6.880%
15-year Fixed6.060%
5/1 ARM5.940%
30-Year Refi6.870%

How Much Mortgage You Need to Buy a Home in Ohio

As home prices rise in some parts of the Buckeye State, so will your down payment, which is a lump sum of money you commit toward the home purchase. 

Conventional loans require a down payment of at least 3% of the home’s purchase price, although if you put down less than 20% you’ll likely need to pay private mortgage insurance, or PMI. You’ll need either 3.5% or 10% for an FHA loan, depending on your credit score, and if you qualify for a VA loan, you may not need a down payment at all. 

You can choose to put down more than the minimum, which will shrink your monthly mortgage payments and reduce the amount of interest you pay over the life of the loan. The table below shows how much a down payment might cost in different metro areas in Ohio.

Metro AreaMedian Home Price3.5%10%20%
Columbus$274,300$9,600.50$27,430$54,860
Cleveland$192,700$6,744.50$19,270$38,540
Cincinnati$244,300$8,550.50$24,430$48,860
Dayton$187,200$6,552$18,720$37,440
Akron$168,000$5,880$16,800$33,600
Source: National Association of Realtors (NAR) data for Q1 2022

Types of Home Loans Available in Ohio 

The major mortgage programs in Ohio include FHA loans, VA loans, and conventional loans. Each program has its own credit score, down payment, and debt-to-income ratio requirements. 

When Manton discusses home loans with homebuyers, he says it’s “important to first find out what the client’s goals are both short-term and long-term with the property before discussing loan options and products.” For instance, homebuyers may use mortgage points to lower their interest rate if they plan on being in the home long term. If the borrower will have the mortgage for just a few years and interest rates are high, they may prefer an adjustable-rate mortgage. ARMs typically have a low introductory interest rate in the beginning of the loan term.

With any mortgage program, “the client needs to understand any and all pros and cons,” Manton says. Here’s what to know about the major mortgage programs.

Conventional loans

Conventional loans are mortgages that aren’t insured or sponsored by a government agency. They’re the most popular type of home loan, so virtually every bank, credit union, and online lender offers them. To qualify for a conventional loan, homebuyers will 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. You’ll also need to budget for private mortgage insurance if you put down less than 20%, but you can eventually drop PMI.  

FHA loans

Homebuyers who don’t qualify for a conventional loan may still qualify for a mortgage backed by the Federal Housing Administration (FHA). With FHA loans, buyers 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

VA loans are mortgages that are insured by the U.S. Department of Veterans Affairs. They’re available to service members, veterans, and surviving spouses. The major draw to this program is the ability to avoid a down payment or mortgage insurance, although borrowers must meet the lender’s specific credit score and DTI limits and pay an upfront funding fee.

First Time Home Buyer Programs in Ohio

There are many homeowner assistance programs in Ohio, both statewide and local.

The Ohio Housing Finance Agency (OHFA) is a state-sponsored entity that offers down payment assistance, discounted interest rates, and other loan products to make buying a home easier. Once you find a participating lender, they can help you apply for the following programs: 

  • Your Choice! Down Payment Assistance: Homebuyers can get either 2.5% or 5% of the home’s purchase price in cash to use toward the down payment and closing costs. The assistance is forgiven after seven years unless you sell or refinance your home within that timeframe. To qualify, you’ll need to meet income and purchase price limits and have a credit score of at least 640 or 650, depending on the loan type. 
  • Grants for Grads: If you’ve graduated from college within the last 48 months, you may qualify for a discounted mortgage interest rate and up to 5% of the home’s purchase price for down payment assistance. The assistance is forgiven after five years as long as you remain in the state of Ohio. 
  • Ohio Heroes: Eligible public servants — such as educators, law enforcement, and medical professionals — may qualify for a discounted mortgage rate and down payment assistance. 
  • Power of Home: This program provides free resources to homebuyers throughout the state. Some of these resources include financial coaching, affordable loans for home repairs, and a database of grant programs. 

Some counties and cities offer help, too. Cuyahoga County, which is home to Cleveland, offers down payment assistance and a home repair loan program to eligible residents. Your lender may also have its own programs, Manton says.

Pro Tip

Ohio has several down payment assistance and other homebuyer programs that can help you afford a home. Talk to your lender about what you can qualify for.

Homeowner Tax Breaks in Ohio

To offset the cost of property taxes, Ohio residents can take advantage of these tax breaks:

  • Owner Occupancy Tax Credit: Homeowners can reduce their property taxes by 2.5% on their primary residence. 
  • Homestead exemptions: Eligible residents can reduce their property taxes by exempting the first $25,000 of their home’s value. You may also need to pass the state’s income means test. Veterans can exempt the first $50,000 of their home’s taxable value. There is no income limit or means testing for veterans.  

“All of these tax-related credits require a completed application with supporting documentation to be provided to the local tax collector,” Manton says.