Tennessee Mortgage and Refinance Rates

Current mortgage rates in Tennessee

As of Saturday, January 25, 2025, current interest rates in Tennessee are 7.00% for a 30-year fixed mortgage and 6.13% for a 15-year fixed mortgage.

Refinance rates in Tennessee

Refinance rates in Tennessee are higher than the historic lows of the pandemic era, which means a mortgage refinance may not appeal to many homeowners. However, if you locked in a rate at the height of the market in 2023, you might be able to refinance to a better rate if prevailing mortgage rates drop enough.

In addition, if you’ve owned your home for a long time and its value has increased substantially in the last few years, you could tap your home equity to further your financial goals. For example, you could do a cash-out refinance or get a home equity loan or line of credit to make updates to your home.

Tennessee mortgage rate trends

Tennessee mortgage rates, including those in popular cities like Nashville and Knoxville, typically follow national mortgage rate trends. For most of 2024, mortgage rates fluctuated between 6 percent and 7 percent before reaching a low in September. Since then, however, 30-year mortgage rates have increased, and 2025 began with rates above 7 percent. Many housing economists predict that 2025 will remain largely unchanged in terms of rate movement, with rates mostly staying in the 6 to 7 percent range.

When mortgage rates and home prices are high, home affordability becomes a larger problem for many aspiring homebuyers. The median sales price of a home in the state was $393,100 as of December 2024 — over 5 percent higher than a year prior — according to Redfin data.

National mortgage rates by loan type

Mortgage statistics for Tennessee

Tennessee has a rich cultural history and has become a popular place to live in recent years. If you’re buying a home in Tennessee, here are some stats to know:

• Most affordable counties, Oct. 2024: Benton, Decatur, Hancock, Hardeman, Lake, Lauderdale, Obion
• Median home sales price, Dec. 2024: $393,100
• Median down payment, Oct. 2024: $48,750
• Homes with price drops, Dec. 2024: 18.8%
• Homeownership rate, Q3 2024: 67.7%

Sources: ATTOM, Redfin, U.S. Census Bureau

Mortgage options in Tennessee

If you won't be paying all cash to fund your home purchase in Tennessee, here are some of the most common mortgage options to choose from: 

• Tennessee conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio of no more than 45 percent. With a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI), as well.
• Tennessee 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. 
• Tennessee 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 to 2.15 percent for the first use.
• Tennessee USDA loans: If you’re buying a rural property in Tennessee, you might be eligible for a mortgage guaranteed by the U.S. Department of Agriculture (USDA). These loans don’t require a down payment, but you’ll need to purchase in a designated rural area and meet the area’s income limits.

First-time homebuyer programs in Tennessee

In addition to conventional loans and FHA loans, the Tennessee Housing Development Agency (THDA) offers a handful of programs designed to assist first-time homebuyers:

• Great Choice Home Loans: The Great Choice Home Loan program is aimed at moderate-income buyers. It offers 30-year fixed-rate mortgages to those with credit scores as low as 640. The program comes with household income and purchase price limits, which vary by county, as well as down payment assistance.
• Homeownership for Heroes: In terms of features, the Homeownership for Heroes program — available to members of the military and law enforcement, paramedics, and firefighters — is very similar to Tennessee's Great Choice Home Loan for first-time homebuyers. It offers a 30-year fixed interest rate and has a minimum 640 credit score requirement. Interest rates through Homeownership for Heroes are reduced a half-percentage point; the requirement that you be a first-time homeowner to participate is waived; and buyers are able to borrow as much as 100 percent of a property's purchase price with a VA or USDA loan, and 96.5 percent with an FHA loan.
• Take Credit MCC Program: The Take Credit Mortgage Credit Certificate (MCC) provides a federal income tax reduction for those who purchase a property in one of the state’s Targeted Areas. In addition to first-time homebuyers, Take Credit MCC is open to veterans or repeat homebuyers, as long as the property is located in one of the state’s qualifying Targeted Areas. MCC participants are eligible for a federal tax credit of as much as $2,000 annually, which can be used to decrease the homebuyer’s income tax liability year after year, as long as the house remains the primary residence.

How to find the best mortgage rate in Tennessee for you

Additional Tennessee mortgage resources

• Tennessee loan limits by county: Learn the loan limits for FHA and conventional loans at the county level.
• Tennessee mortgage lenders: Explore mortgage lenders in your state.
• How to buy a house in Tennessee: Get set up for a successful house hunt with this guide.
• Homeowners insurance in Tennessee: Read all about the ins and outs of protecting your property. 
• Mortgage calculator: Estimate how much you’ll pay each month and how much interest you’ll pay over the entire loan.

Meet our Bankrate experts

Written by: Andrew Dehan, Writer, Home Lending

I’ve covered mortgages, real estate and personal finance since 2020. At Bankrate, I’m focused on all of the factors that affect mortgage rates and home equity. I enjoy distilling data and expert advice into takeaways borrowers can use. Prior to Bankrate, I wrote and edited for Rocket Mortgage/Quicken Loans. My work has been published by Business Insider, Forbes Advisor, SmartAsset, Crain’s Business and more.

Read more from Andrew Dehan

Edited by: Laurie Richards, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English. 

Read more from Laurie Richards