Compare Jumbo Mortgage Rates

How Bankrate's mortgage rates are calculated

Lenders nationwide provide weekday mortgage rates to our comprehensive national survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans. The interest rate table below is updated daily to give you the most current purchase rates when choosing a home loan. APRs and rates are based on no existing relationship or automatic payments. For these averages, the customer profile includes a 740 FICO score and a single family residence. To learn more, see understanding Bankrate's rate averages.

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What is a jumbo loan?

A jumbo loan is one that exceeds the limits for conforming loans set by the Federal Housing Finance Agency (FHFA). These conforming loans are those that can be serviced by Fannie Mae and Freddie Mac. Because a jumbo loan exceeds these limits, it is also called a non-conforming loan.

When you get a jumbo mortgage, your lender can’t rely on federally-backed insurance from Freddie and Fannie to reduce some of their risks. Many of the home loan programs provided by the government operate under the principle that lenders will be able to recoup some of their losses if a borrower defaults. At the very least, lenders know they can sell their loans to these government-sponsored enterprises, in part, to promote liquidity in the home loan market.

Jumbo loan requirements

Each year, the FHFA reviews home prices and the market and determines what the conforming loan limit will be. The limit is set based on home price increases, as well as where the homes are located, usually by county. Any mortgage above the conforming loan amount is considered a non-conforming loan — a jumbo loan. For 2020, the new upper limit for most conforming loans is $510,400. However, there are some areas of the country that have a higher conforming loan limit of differing amounts up to $765,600.

You can find the non-conforming loan limits for every state and county here.

Before you apply for a high-dollar mortgage, it makes sense to find out if you live in one of those high-cost areas because that can make a difference. The FHFA offers an interactive map of all the counties in the United States, along with the conforming limits in those counties. If your mortgage exceeds the conforming loan limit, it’s a jumbo loan, and you’ll need to take that into account as you move forward.

Jumbo loan qualifications

While there is no jumbo loan limit set by regulation, the reality is that you’ll have to meet certain qualifications to get a non-conforming loan.

When lenders make conforming mortgages, they know that they can sell the loans to Fannie and Freddie and offload some of the risks. However, with a non-conforming loan, that option isn’t available, so jumbo mortgage lenders often require a little more from borrowers. This can include such qualifications as:

• A higher credit score than might be required for a conforming loan
• 20 percent minimum down payment
• Better debt-to-income ratio

15-year versus 30-year jumbos

Interest rates for 15-year fixed jumbo mortgage loans are usually somewhat lower than those for those for 30 years. Of course, monthly payments on 15-year jumbos--already high because of the values of the property involved--are considerably higher with a 15 year loan, compared with a 30, because the payment schedule is telescoped into half the time. But you’ll be finished paying sooner, and your total borrowing costs will be lower.

How is the mortgage process different with a jumbo loan?

To get one of these large mortgages, you’ll probably have to jump through more hoops. For instance, you’ll need to show you have a jumbo-sized salary and that you’ve saved a larger down payment, as a percentage of the total amount financed, than is required for a regular or conforming loan. Depending on other factors, it’s not uncommon for lenders to require a 20 percent down payment for a jumbo, compared with as little as 5 percent--or sometimes less--for a conforming loan.

You’ll also probably need a better credit score. With a conforming loan, you might be able to get approved even with a credit score as low as 500. But for a jumbo loan, 700-plus is often required because lenders need assurance that you have the monthly income necessary to keep up with the high payments involved with a high-price property.

Additionally, you might need to go through a more rigorous vetting process for your income and assets with a jumbo mortgage. Depending on the lender requirements, it might take longer to close on a non-conforming loan than it would to close on a conforming loan.

Shopping around for the best jumbo mortgage rates

When getting a jumbo loan, it’s a good idea to shop around. Bankrate is a good starting point. Because a non-conforming loan is usually for such a large amount, getting the best rate can make a big difference in the amount of interest that you pay.

Check with local financial institutions as well, since sometimes community banks or credit unions can have good rates — and they might be more willing to work with you because you’re both members of the same community. Another source is mortgage brokers who specialize in jumbo loans.

As you compare jumbo loan rates, make sure you provide information that’s as accurate as possible. Because your credit score is going to be a big determinant of your rate, review your credit report. If you see errors, have them fixed before you start looking for a home.

Be prepared to answer questions about your liquid and non-liquid assets, as well as how much you can make for a down payment. You should also have an accurate idea of your income and your debt levels so you can let potential lenders know your debt-to-income ratio. The more accurate your information, the more accurate your mortgage rate quote will be.

Bottom line

If you plan to buy a home and need a loan that exceeds the conforming limit set by the FHFA, you need to understand jumbo loans. You’ll probably have a more involved and complicated process to go through to fund your home. However, if you move forward with the right lender, there’s a good chance that you’ll be able to get the home of your dreams — even if you use a non-conforming loan.