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Mortgage rates in Alabama

Interest rates on a 30-year $300,000 conventional mortgage start at around 3.125%

If you have a credit score between 700 and 719 and can put 5% down, you’ll generally pay about 3.250% for a 30-year conventional loan with a fixed interest rate on a $350,000 home. But how much interest you pay for your Alabama home will depend on several factors, including your credit score, loan amount and lender.

Rates were last checked on October 6 and are from the Consumer Financial Protection Bureau (CFPB) website.

Your credit score affects the rate you’ll get

People with higher credit scores generally get lower interest rates because lenders assume they’re less likely to stop paying a mortgage. Here are the most common interest rates in Alabama by mortgage amount, according to the Consumer Financial Protection Bureau (CFPB).

Credit score $200,000 mortgage $300,000 mortgage $400,000 mortgage $500,000 mortgage
620-639 3.875% 3.938% 3.750% 3.750%
640-659 3.688% 3.688% 3.625% 3.563%
660-679 3.500% 3.563% 3.438% 3.438%
680-699 3.375% 3.313% 3.250% 3.250%
700-719 3.250% 3.250% 3.250% 3.250%
720-739 3.188% 3.125% 3.125% 3.125%
740-759 3.125% 3.125% 3.063% 3.063%
760-779 3.125% 3.125% 3.063% 3.063%
780-799 3.125% 3.125% 3.063% 3.063%
800+ 3.125% 3.125% 3.063% 3.063%

*Based on a 10% down payment for a 30-year fixed-rate conventional mortgage

Interest rates vary by lender

Interest rates are affected by the economy and the federal funds rate, or the rate that banks charge each other for overnight loans. But they’re also affected by individual lenders, which can have differing overhead costs, profit margins and credit score requirements.

Comparing lenders can help you find the best deal. Select See rates to provide the company with basic property and financial details for personalized rates.

Name Product Loan products offered State availability Min. credit score
(NMLS #1121636)
Conventional, Home equity, Refinance
Not available in: HI, MO, NM, NY, WV
No hidden fees, multiple loan terms, and member discounts available.
Rocket Mortgage
(NMLS #3030)
Rocket Mortgage
Conventional, Jumbo, FHA, VA, Refinance
Available in all states
Streamline your mortgage from quote to final payment — all from your computer or phone.
(NMLS #330511)
Conventional, Jumbo, FHA, Refinance
Not available in: HI, MA, MN, NV, NH, VT, VA
Online preapproval in minutes and no origination fees with this direct lender.
(NMLS #1136)
Conventional, Jumbo, FHA, VA, USDA, Home Equity, HELOC, Reverse, Refinance
Available in all states
Connect with vetted home loan lenders quickly through this online marketplace.

Compare up to 4 providers

Interest rates also vary by loan type

The type of loan you get can also affect how much you pay for your Alabama home. 15-year mortgages generally offer lower interest rates than 30-year mortgages, and you’ll see different rates for conventional loans than government loans.

Loan type $200,000 mortgage $300,000 mortgage $400,000 mortgage $500,000 mortgage
15-year conventional 2.500% 2.438% 2.375% 2.375%
30-year conventional 3.250% 3.250% 3.250% 3.250%
15-year FHA 2.500% 2.375% Not eligible Not eligible
30-year FHA 3.000% 3.000% Not eligible Not eligible
15-year VA 3.000% 2.813% 2.563% 2.563%
30-year VA 3.250% 3.313% 3.125% 3.125%

*Based on a 10% down payment, fixed interest rate and 710 credit score

Research ahead of time to get the best rates

To get the best mortgage rate possible, look into several lenders and stay on top of your credit.

  1. Compare loan products. Lenders offer loans from conventional to government-insured. These come with various down payment requirements and terms.
  2. Improve your borrowing profile. Lenders like to see specific borrowing criteria, such as good credit scores and low debt-to-income ratios.
  3. Compare closing costs. Lenders charge different amounts to close on a loan, which in Alabama can run between 1.33% to 2.65% of the sale price.

Home values in Alabama are forecast to increase

As across the US, home prices in Alabama are trending upward. According to Zillow, the price of a typical home in Alabama increased by 13% in the 12 months prior to June 2021. But while prices are rising, increases are uneven across the state, depending on the area and demand.

In the state capital of Birmingham, home prices are forecast to increase from 14.7% to 16.5% by June 2022 — which is significantly higher than most other areas in the state. But in less populated areas like Brierfield and Lynn, home prices are only forecast to rise by 3% and 4%, respectively.

An increase in prices likely means paying more for a home if you wait a year or two and potentially losing out on building equity. Conversely, rising home prices may work in your favor if you buy now and sell your house in the future.

5 fast facts about Alabama’s housing market

If you’re looking to a buy a home in Alabama, here are five facts you should know:

  1. The average home price in Alabama is $170,184 as of June 2021 — 42% cheaper than the national average.
  2. The average monthly ownership cost of a home in Alabama is $1,186 with a mortgage, which is 25% less than the national average of $1,595.
  3. The Alabama Housing Finance Authority (AHFA) offers several programs to help low-income homebuyers afford their first home, including its Step Up program and Mortgage Credit Certificates.
  4. At $3.33 per $1,000 in real property value, Alabama residents pay some of the lowest property taxes in the country, according to H&R Block.
  5. 68.8% of Alabamians own their home, which is higher than the average US homeownership rate of 64%.

Bottom line

Mortgage rates in Alabama vary by loan type, and factors like your credit score and lender affect what rate you get. But factors like your credit score and lender affect what rate you get. Compare mortgage lenders and programs to find one that best fits your homeownership goals.

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