Mortgage Rates in California

California mortgage overview

Home to three of the 10 largest cities in the country, it’s no surprise that many want to plant roots in the Golden State. When it comes to mortgages in California, you have plenty of options. Here are some common loan types:

• California conventional mortgages: Rates and requirements will vary depending on the area you want to live in and your financial situation. You can compare mortgage rates to find the option that’s right for you.
• CalHFA: The California Housing Finance Agency (CalHFA) offers state residents access to mortgages, as well as smaller loans designed to help with a down payment or closing costs. To get started, borrowers can contact a CalHFA-approved lender or preferred loan officer.
• California FHA loans: Home loans backed by the Federal Housing Administration (FHA) are offered throughout the U.S. While the FHA doesn’t offer loans directly, you can find one through an FHA-approved lender in California. They are offered to first-time homebuyers, defined as those that have not purchased a home in the past two years, as well as repeat buyers. FHA loans are generally designed for low- to moderate-income borrowers with lower credit scores.
• California VA loans: Backed by the Department of Veterans Affairs, VA loans are offered to eligible veterans and active duty service members. While the VA doesn’t offer loans directly, you can find one through a VA-approved lender in California. They require no down payment and typically have lower interest rates than conventional mortgages.

First-time homebuyer programs in California

First-time homebuyers in California have access to assistance in the form of grants and programs. Learn more about California first-time homebuyer programs.

• CalHFA down payment assistance programs: Low- to moderate-income borrowers can apply for small down payment and closing costs assistance loans through CalHFA. One option is the MyHome Assistance program, which allows you to borrow a deferred loan worth up to 3.5 percent of the purchase price or appraised value to help you cover closing costs and the down payment.
• CalHFA and CalPLUS Conventional Loan Programs: With the CalHFA Conventional Loan Program, you can get a 30-year fixed-rate mortgage on the conventional market. This means you’ll have access to competitively low interest rates, but you’d also need to meet qualification requirements. The CalPLUS Conventional Loan Program is similar, but with a slightly higher interest rate that can be combined with the CalHFA Zero Interest Program to help pay closing costs.
• CalHFA Cal-EEM + Grant program: The CalHFA Cal-EEM + Grant program combines an FHA Energy Efficient Mortgage (EEM) with an additional Cal-EEM grant. This grant assists buyers with energy-efficient home improvements above the FHA maximum allowable EEM loan amount. To qualify, you must meet income limits and other requirements outlined in the latest program handbook.

California mortgage refinancing

With interest rates at historic lows, you may be able to lower your monthly payment and save thousands by refinancing your loan to a lower rate. You can use Bankrate’s mortgage refinance calculator to see how much you can save.

The bigger picture

California is, of course, a major housing market in the U.S. with some of the most expensive real estate in the country. While low mortgage rates have driven a real estate boom nationally, all that competition for housing is driving up prices and tightening inventory in many markets, which means that the Golden State's already-pricey real estate is getting even pricier. If you're looking to buy in California soon, be ready to make your offer count, and prepare to be competing with other potential buyers. Check out Bankrate's tips for first-time homebuyers to learn more and make sure you have everything you need before you start your housing search.