The rate for a 30-year jumbo mortgage averaged 3.48 percent this week, hitting that record-low number for the second time in about a month, according to Bankrate’s weekly survey.
A jumbo, or non-conforming, mortgage is one that exceeds the maximum value of a traditional loan. In most areas of the U.S., a jumbo mortgage for any single-family home is a loan valued at $510,400 or more. The low-end threshold for these loans jumps to $765,600 in more-expensive areas.
The actual value of the property isn’t the key factor though — you can avoid taking out a jumbo mortgage on any price home by putting enough money down. It’s all about how much you have to borrow, and there are some benefits to getting a conforming mortgage if you can: your balance will be lower, and you’ll probably get a lower interest rate as well. This week, traditional 30-year fixed mortgages averaged just 3.07 percent.
Jumbo loans lost some popularity with new buyers at the start of the pandemic, but refinances remained strong. Even with relatively higher rates compared with conforming mortgages, pretty much all home loans are good deals these days, because interest rates remain historically low across all product classes.
“We are seeing demand across both jumbo and conforming mortgages remaining high as customers are realizing savings with interest rates at or near historic lows,” Pete Boomer, a mortgage executive at PNC Bank previously told Bankrate. “We are also seeing portfolio customers inquiring about the ability to modify their interest rates and payments rather than refinancing.”
Another plus for existing non-conforming loans is that won’t be affected by the coming Federal Housing Finance Agency refinance fee, because that only applies to mortgages that are meant to be bundled into securities, and jumbo loans usually don’t qualify.