Minnesota Mortgage and Refinance Rates

Current mortgage rates in Minnesota

After a decade of low rates, mortgage interest rates have climbed to their highest levels since 2000. As of Sunday, December 10, 2023, current interest rates in Minnesota are 7.28% for a 30-year fixed mortgage and 6.72% for a 15-year fixed mortgage.

Elevated mortgage rates continue to make housing affordability a challenge for Minnesota homebuyers, and refinances far less desirable for homeowners. While mortgage rates are difficult to predict, many economists expect them to remain well above their historical lows for the foreseeable future.

Refinance rates in Minnesota

While mortgage refinance rates are much higher than the lows of 2020 and 2021, the equity in your home could rise and make it easier for you to get your refinance application approved. Refinancing is challenging in the current rising-rate environment, but you could save thousands if you shop around and snag a lower rate. Check out our mortgage refinance calculator to understand whether refinancing in Minnesota would be a smart move for you.

Minnesota mortgage rate trends

As of October 2023, mortgage rates nationally and in Minnesota had risen to their highest levels since 2000, according to Bankrate’s national survey of lenders.

National mortgage rates by loan type

Mortgage statistics for Minnesota

Minnesota’s home prices have registered robust appreciation for years. Here are some statistics about mortgages and the housing market in The Land of 10,000 Lakes:

• Average home value (as of Oct. 2023): $330,406 (Zillow)
• Homeownership rate (as of Dec. 2022): 75.1% (U.S. Census Bureau)
• Average mortgage loan size in 2022: $323,870 (Home Mortgage Disclosure Act)

Mortgage options in Minnesota

If you want to make Minnesota your home, you have several mortgage options to choose from:

• Minnesota conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no more than 45 percent. If you make a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) premiums, as well.
• Minnesota FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a down payment of at least 3.5 percent, you could qualify for this type of loan with a credit score as low as 580.
• Minnesota VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage guaranteed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which ranges from 1.25 percent to 2.15 percent.

First-time homebuyer programs in Minnesota

Minnesota offers first-time homebuyer programs that can help those who haven’t owned a home in the past three years find low-interest mortgages. These programs, administered through the Minnesota Housing Finance Agency, also offer smaller loans to help pay fees and closing costs. Here’s an overview:

• Minnesota Housing Start Up: If you’re a first-time homebuyer or haven’t owned a home in the past three years, you might be eligible for the Minnesota Housing Start Up program, which includes fixed-interest mortgages with as little as 3 percent down, along with closing cost and down payment assistance loans up to $18,000. To help lower your monthly mortgage payment, the Start Up program also includes low- or no-mortgage insurance options. To qualify, you must meet Minnesota Housing income limits and purchase price limits ($515,200 in the 11-County Twin Cities Metro and $472,030 in all other counties as of 2023).
• Minnesota Housing Monthly Payment Loan: If you qualify for Start Up or another Minnesota Housing loan, you might be eligible for up to $18,000 towards your down payment or closing costs.
• Minnesota Housing Deferred Payment Loans: Minnesota Housing offers two other down payment assistance options, as well: a Deferred Payment loan up to $16,500 for a down payment or closing costs; or a Deferred Payment Plus option offering as much as $18,000.

Additional Minnesota mortgage resources

• Minnesota loan limits by county: Learn the conforming loan limit for your city or town.
• Minnesota mortgage lenders: Explore mortgage lenders in your state.

How to find the best mortgage rate in Minnesota for you

• Step 1: Strengthen your credit score - Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your credit score if needed.
• Step 2: Determine your budget - To find the right mortgage, you’ll need a good handle on how much house you can afford.
• Step 3: Know your mortgage options - There are a few different types of mortgages.
• Step 4: Compare rates and terms from several lenders - Rate-shop with at least three different banks or mortgage companies.
• Step 5: Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Learn more about how to get a mortgage.