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Mortgage rates in Alabama
It ranked 17th in a national study comparing states with the highest rates.
Regardless if you’re house-hunting in metropolitan Birmingham to Gulf Shores of Alabama, you’ll want the most competitive interest rate on your loan. Alabama’s rates are near the national average and are expected to hold steady around 4% into 2020.
Compare mortgage lenders and brokersCompare these lenders and lender marketplaces by the type of home loan you're searching for, state availability and minimum credit score (for a conventional loan). Select See rates to provide the company with basic property and financial details for personalized rates.
How much do Alabama rates vary by loan?
Average rates for a 30-year mortgage in Alabama ranged from 4.568% to 4.789% in 2018. The average rate for a 30-year conventional loan was 4.789%, while the average rate for a 15-year loan was 4.670%.
2018 average rates in Alabama by loan type
|Loan type||15-year average rate||30-year average rate|
Based on data from ffiec.cfpb.gov.
A slight difference in interest rate can mean the difference of a few thousand dollars over the life of the loan. For instance, the monthly payment for a $165,000 mortgage at the 30-year average rate might run you $864.60 a month, excluding taxes, fees and other costs specific to your mortgage.
On the other hand, if you opted for a 15-year loan term, your monthly payment could jump to $1,280. But you could also save $81,460 in interest over the life of the loan.
Which way are rates trending in Alabama?
Alabama mortgage rates are expected to remain steady and hover around the 4% mark in 2020. Historically, Alabama mortgage rates have followed the national average. According to Bankrate, the 2019 national average 30-year fixed mortgage rate steadily declined to close out the year at 3.93%, and mortgage rates shouldn’t stray too far from 4% in 2020.
Compare mortgage rates throughout Alabama
Alabama has a number of metropolitan areas with home values that vary. How much you’ll pay for a loan in Alabama depends on where you live, ranging from $125,000 to $205,000. The average mortgage rate within each geographical area also varies slightly. Together, that can mean a substantial difference to your monthly mortgage payment.
We used data from the Home Mortgage Disclosure Act to give you an idea of what you might pay on a 30-year fixed-rate mortgage in metropolitan areas across Alabama. Rates and amounts don’t include taxes, fees or costs specific to your mortgage.
|Metropolitan statistical area (MSA)||Average mortgage rate||Median loan amount||Estimated monthly cost|
|Auburn-Opelika MSA (Lee County, AL)||4.729%||$205,000||$1,070|
|Columbus MSA (Russell County, AL)||4.799%||$155,000||$810|
Based on data from ffiec.cfpb.gov
How to get the best mortgage rate in Alabama
To get the best mortgage rate possible, look into several lenders and stay on top of your credit.
- Compare loan products. Lenders offer loans from conventional to government-insured. These come with various down payment requirements and terms.
- Improve your borrowing profile. Lenders like to see specific borrowing criteria, such as good credit scores and low debt-to-income ratios.
- 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.
Historical mortgage interest rates in Alabama
Although interest rates correlate with the Federal Funds Rate set by the Federal Reserve, lenders ultimately determine the mortgage rates on their loans. Compare mortgages and lenders to find the loan and rate that’s best for you.
Frequently asked questions
Does Alabama have any state programs with lower mortgage rates?
The Alabama Housing Finance Authority (AHFA) offers the Step Up homeownership program. Homebuyers who make $97,300 or less can qualify for a low-interest rate on a 30-year mortgage and down payment assistance.
Where can I find a housing counselor in Alabama?
You can find a list of HUD-approved housing counseling agencies in Alabama on the HUD website or by visiting the Alabama Housing Authority Resources & Links page.
How do I apply for a loan with the Alabama Housing Finance Authority?
AHFA doesn’t originate loans to homebuyers. Instead, it works with a group of lenders to provide AHFA housing programs. You can search for a network lender in your city on the AHFA website.
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