How Some Million Dollar Home Buyers Are Getting Better Mortgage Rates

If you’re in the market for a new home, you may get a better rate for a more expensive home. According to newly released figures, the rate for a 30-year fixed jumbo mortgage last week averaged 4.48-percent.

That’s much less than the average 4.95-percent for a conventional loan. It’s also quite different from the early days of the pandemic when jumbo rates were about a half a percentage point higher than smaller mortgages.

Jumbo mortgages aren’t tied to secondary market as much as conventional loans. According to Bankrate.com data collected over the years, the recent gap between the two makes for the widest advantage high-end borrowers have seen since 1998. 

In most places, a jumbo loan is a mortgage for an amount over $647,200. It’s above $970,800 in high-price housing markets like New York City and San Francisco. 

Jumbo loan rates are different, plus the market’s a bit smaller for them and qualifying guidelines do sometimes vary. Still, the current rate for a jumbo mortgage may be somewhat of a nice surprise for homebuyers who need to take on a larger loan. 

It’s no secret that in some of the nation’s most expensive cities, $1 million is more of an entry point these days than the price of a luxury home. If that trend continues, it’s likely more and more homebuyers will be forced to take on larger loans in many cities and towns across the nation.