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Mortgage rates in Iowa

Rates often come in higher than the rest of the country.

Updated

Fact checked

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 Iowa

With national rates set to hover around 4% in 2020, rates in the Hawkeye State come in slightly above at 4.576% for a 30-year conventional loans, and a bit higher at 4.634% for government-insured options.

How much do Iowa rates vary?

According to 2018 data, average mortgage rates for 30-year mortgages in Iowa range from 4.465% to 4.805%. A few variables can impact your rate. For example, VA loans generally have lower interest rates and more requirements than conventional mortgages.

2018 average rates in Iowa by loan type

Loan type15-year average rate30-year average rate
Conventional4.438%4.576%
FHA4.369%4.805%
VA3.925%4.465%
USDANot available4.632%

Based on data from ffiec.cfpb.gov.

To give you an idea of how much a slight difference in interest rate can make, suppose you had a $145,000 mortgage. A 30-year conventional loan with an average rate of 4.576% might cost $741.26 per month, before taxes and fees. On the other hand, a 30-year VA loan with an average rate of 4.465% might have a monthly payment of $731.68.

Although the difference is only $9.58 per month, the VA loan could save you $3,446.89 over the life of the loan.

Mortgage rates in Iowa will likely seesaw around the 4% mark in 2020.

Iowa mortgage rates have come in higher than the rest of the country, especially since 2014. In 2018, mortgage rates in Iowa averaged 0.18% higher than the national average, with 2017 coming in 0.13% higher.

Housing authorities, including mortgage buyers Freddie Mac and Fannie Mae, predict 30-year rates to average between 3.55% and 3.9%. Iowa mortgage rates will probably come in above the national average at a solid 4%.

Compare mortgage rates throughout Iowa

Mortgage rates and home values fluctuate slightly in the Hawkeye State, relative to the metropolitan area you live in. That means even if you have the same rate as another homebuyer in the next county over, you may have a higher monthly payment because home prices are higher in your area.

We took a look at data from the Home Mortgage Disclosure Act to give you an idea of what the average 30-year fixed-rate mortgage might cost you in different metropolitan areas in Iowa. These estimated payments don’t account for taxes, fees, PMI or other expenses specific to your mortgage.

Metropolitan statistical area (MSA)Average mortgage rateMedian loan amountEstimated monthly cost
Ames4.653%$175,000$900
Cedar Rapids4.481%$145,000$730
Davenport MSA (Scott County, IA)4.572%$155,000$790
Des Moines-West Des Moines4.609%$185,000$950
Dubuque4.524%$155,000$790
Iowa City4.286%$195,000$960
Omaha MSA (Harrison, Mills and Pottawattamie Counties, IA)4.745%$145,000$760
Sioux City MSA (Woodbury County, IA)4.766%$135,000$700
Waterloo-Cedar Falls4.514%$125,000$630

Based on data from ffiec.cfpb.gov.

How to get the best mortgage rate in Iowa

Here are some strategies to get the best mortgage rate in Iowa:

  1. Read up on loan programs. Lenders offer different loan programs with varying interest rates. Find out which loan products you’re eligible for and compare rates.
  2. Improve your borrowing profile. Before you apply for a loan, take some time to boost your credit score and lower your debt-to-income ratio by paying down debt. Lenders give the best rates to borrowers with strong credit profiles.
  3. Check closing costs. Some lenders advertise lower interest rates but tack on high closing costs. Closing costs range from 0.96% to 1.91% in Iowa of the home purchase price. Weigh all the costs attached to your loan, from the interest rate to what’s due at closing.

Historical mortgage interest rates in Iowa

Bottom line

Iowa mortgage rates frequently surpass the national average. With predictions for the US 30-year rates in the upper 3%, Iowa mortgage rates will likely dance around 4% in 2020. Compare mortgages and lenders to find the best loan program for you.

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