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Mortgage rates in Alabama

It ranked 17th in a national study comparing states with the highest rates.

Updated

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Mortgage rates during the coronavirus

As mortgage rates fall to record lows in the wake of COVID-19, our partners are seeing an increase in demand for loans and refinancing. As they work through this influx of applications, you may see rates that are higher than expected — or no rates at all. We recommend comparing offers from multiple lenders to ensure you're getting the best deal possible.

Compare mortgage lenders in Alabama

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.

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 type15-year average rate30-year average rate
Conventional4.670%4.789%
FHA4.286%4.728%
VA3.967%4.568%
USDAN/A4.633%

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.

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 rateMedian loan amountEstimated monthly cost
Anniston-Oxford4.725%$125,000$650
Auburn-Opelika MSA (Lee County, AL)4.729%$205,000$1,070
Birmingham-Hoover4.750%$185,000$970
Columbus MSA (Russell County, AL)4.799%$155,000$810
Daphne-Fairhope-Foley4.749%$205,000$1,070
Decatur4.771%$135,000$710
Dothan4.776%$155,000$810
Florence-Muscle Shoals4.639%$135,000$700
Gadsden4.708%$135,000$700
Huntsville4.647%$185,000$950
Mobile4.78%$145,000$760
Montgomery4.74%$165,000.00$860
Tuscaloosa4.63%$165,000.00$850

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.

  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.

Historical mortgage interest rates in Alabama

Bottom line

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.

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