Montana Mortgage and Refinance Rates

Current mortgage rates in Montana

As of Thursday, December 7, 2023, current mortgage interest rates in Montana are 7.58% for a 30-year fixed mortgage and 6.74% for a 15-year fixed mortgage.

Mortgage rates rose in 2022, and are now aligned more closely with average historical mortgage rates. Like much of the U.S., Montana’s housing market has seen home prices climb in recent years. You might have less buying power now, making it all the more important to shop at least three mortgage lenders for the best rate.

Refinance rates in Montana

Refinance rates are now much higher than the rock-bottom levels of the past few years. Still, you might consider a cash-out refinance on your Montana home to pay for renovations or other expenses. If you want to use your equity but don’t want to refi, a home equity line of credit (HELOC) is another option.

Mortgage options in Montana

Homebuyers in Montana have several mortgage options to choose from:

• Montana conventional mortgages: A conventional mortgage usually requires a credit score of 620 and a debt-to-income (DTI) ratio of 45 percent or less. The minimum down payment is 3 percent (note at the level, you’ll pay private mortgage insurance, or PMI, premiums).
• Montana FHA loans: A loan insured by the Federal Housing Administration (FHA) might be a better option if you have a lower credit score. You could get an FHA loan with a credit score of 580 and a 3.5 percent down payment.
• Montana VA loans: The Department of Veterans Affairs (VA) guarantees mortgages for qualifying veterans, surviving spouses and active-duty service members. VA loans don't require a down payment or mortgage insurance, but you’ll need to pay a funding fee.
• Montana USDA loans: Depending on where you buy in Montana, you might be eligible for a loan guaranteed by the U.S. Department of Agriculture (USDA). USDA loans don’t require a down payment and can come with reduced interest rates.

First-time homebuyer programs in Montana

Montana Housing, the state’s housing finance agency, administers homeownership and rental programs, which include first-time homebuyer programs. Montana Housing also works along with NeighborWorks Montana, a nonprofit organization, to help make homeownership more affordable. The state defines a first-time homebuyer as someone who hasn’t owned a home in the past three years.

Regular Bond Program

Montana Housing’s Regular Bond Program provides 30-year, low-interest mortgages to eligible first-time homebuyers in the state purchasing a single-family home, condo or manufactured home. The interest rates vary and are based on credit history, and you’ll need to be within location-based household income and home purchase price limits. You’ll need to meet the criteria for an FHA, VA, USDA or Section 184 loan, as well, and might be required to take a homebuyer education course.

Down Payment Assistance Programs

Through Montana Housing’s Down Payment Assistance programs, first-time homebuyers who need help coming up with the down payment and closing costs can receive funds from the state in conjunction with a Regular Bond Program loan. There are two down payment assistance programs available:

• Bond Advantage DPA: A 15-year mortgage for up to 5 percent of the home’s sale price, up to $15,000, with low monthly payments; requires a $1,000 investment from the borrower, a minimum credit score of 620 and completion of a homebuyer education course
• MBOH Plus 0% Deferred DPA: A zero-percent interest mortgage for up to 5 percent of the home’s sale price, up to $15,000, with no monthly payments, due when the first mortgage is paid off or the home is refinanced or sold; requires a $1,000 investment from the borrower, a minimum credit score of 620, a maximum DTI ratio of 45 percent and completion of a homebuyer education course; there’s an income limit of $80,000 for households of two or less and $90,000 for households of three or more

80% Combined Program

Under the 80% Combined Program, homebuyers who are eligible for Montana Housing financing can apply for an alternative to an FHA-insured loan to avoid paying mortgage insurance. To accomplish this, you’ll have two mortgages: an 80 percent, 30-year first mortgage, and a 20 percent second mortgage.

This program requires a credit score of 640 and a DTI ratio of no more than 45 percent. You’re also required to pay 1 percent of the home’s purchase price, or a minimum of $1,000. Your household also must be within area-specific income limits.

Montana Veterans’ Home Loan Program

The Montana Veterans’ Home Loan Program helps residents who are serving or have already served in the military or the Montana National Guard purchase their first home. The program offers a mortgage with an interest rate 1 percent lower than the current market rate. You’ll need to take a first-time homebuyer class and invest a minimum of $2,500 in the home. While there’s no income, purchase price or asset limits, there’s a maximum loan amount of $457,117.

Mortgage Credit Certificate

A mortgage credit certificate (MCC) is a federal tax credit. The credit applies to 20 percent of your mortgage interest, up to a maximum of $2,000, each year. You must apply for the credit with a participating lender after signing the purchase contract, but before closing.

Additional Montana mortgage resources

• Montana first-time homebuyer resources
• Montana loan limits by county
• Montana mortgage lenders

How to find the best mortgage rate in Montana for you

Consider at least three offers from different types of mortgage lenders. Be aware that lenders advertise the APR, or annual percentage rate, which reflects the total fees and any points you’ll pay, in addition to the interest rate. It’s best to use the APR as the basis of comparison between lenders.

Along with finding a great rate, you might be able to qualify for down payment and closing costs assistance in Montana — more on that below.