Today's Jumbo Mortgage Rates

If you're looking to buy a home in an expensive housing market or want a house that's just a wee bit pricier than the national average, you may need to take out a jumbo loan. These "nonconforming" loans can help you afford properties that are too expensive for conventional mortgages, as well as help you remain competitive in markets where prices are higher than the national average.

With that in mind, here's an overview of what today's jumbo mortgage rates look like.

What is a jumbo mortgage?

A jumbo mortgage is a mortgage loan that exceeds the limits for conventional conforming loans set by the Federal Housing Finance Agency (FHFA), thereby making them nonconforming. In 2023, the FHFA set a limit of $726,200 for a single-family home. Any home buyer seeking a mortgage above this amount will likely need to take out a jumbo loan.

Conforming loans, by contrast, stick to the standards imposed by Fannie Mae and Freddie Mac, which are the government-sponsored entities that buy most mortgages and help keep the supply of mortgages liquid. Jumbo loans are not backed by these entities, which makes them more risky to lenders. As such, you normally need a high credit score, low debt-to-income ratio, and ample cash reserves, along with other factors to get approved.

In some high-cost areas, the FHFA sets higher limits for jumbo loans. For instance, in Alaska, Hawaii, Guam, the U.S. Virgin Islands, and various metropolitan areas throughout the contiguous U.S., jumbo mortgages can have loan amounts that exceed $1,089,300.

How to find the best jumbo mortgage interest rates

Many lenders who give out regular mortgages also issue jumbo loans. Your best bet is to shop around with different mortgage lenders and see which are offering jumbo mortgages with the most favorable terms, including:

• Competitive interest rates
• A length that works for you (15-year versus 30-year)
• The lowest closing costs and fees

It's best to do all of your jumbo mortgage shopping within the same 30-day timeframe. Each time you apply for a mortgage, a lender will access your credit report to see if you're an eligible borrower. This counts as a hard inquiry. A single hard inquiry may ding your credit score a little, but many hard inquiries can bruise it significantly. However, if you apply for multiple mortgages within a short span of time, all of those hard inquiries will count as just one. As a result, your score won't drop quite as low.

Is a jumbo mortgage right for me?

You'll need a jumbo mortgage if your loan amount exceeds the limits for conforming loans in your area. But these mortgages have their drawbacks. For one thing, you may get stuck with a higher interest rate than you'd find for a conforming loan. Secondly, you could face higher closing costs with a jumbo mortgage than with a conforming loan. That upcharge may stem largely from added appraisal costs to ensure that the market value of the home you're buying supports the amount you're looking to borrow.

Finally, jumbo mortgages usually require your finances to be in tip-top shape. Since your loan balance will be higher, your mortgage payments will also be jumbo-sized, even if you get a favorable interest rate. For approval, you'll need a high credit score (typically 700 or higher), a low debt-to-income ratio (usually 40% or less), and a down payment between 10% and 20% to qualify. With other types of home loans, you could get away with lower scores, higher debt-to-income ratios, and a substantially smaller down payment.

That said, if you have an excellent credit score, enough savings to make a 10% down payment, and a high enough income to keep up with a higher monthly payment, it pays to apply for a jumbo mortgage and see what interest rates lenders are offering.