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Current Tennessee Mortgage and Refinance Rates

On Tuesday, October 03, 2023, the national average 30-year fixed mortgage APR is 7.82%. The national average 30-year fixed refinance APR is 8.03%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

On Tuesday, October 03, 2023, the national average 30-year fixed mortgage APR is 7.82%. The national average 30-year fixed refinance APR is 8.03%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

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Current mortgage rates in Tennessee

Mortgage interest rates are reaching their highest levels since 2008. As of Tuesday, October 3, 2023, current interest rates in Tennessee are 7.91% for a 30-year fixed mortgage and 6.98% for a 15-year fixed mortgage.

The typical home value in Tennessee is $305,613, below the national median of $389,500. Demand for housing in the state is increasing, as Tennessee was the nation's third-most top growth state in 2021. Home prices are likely to climb higher, and your home's value may increase over time.

Refinance rates in Tennessee

If you're looking to lower your interest rate, refinancing in Tennessee can be a smart move. You may benefit from the tight housing market. If the equity in your home continues to rise, it might be easier for you to get your refinance application approved. Check out the Bankrate Mortgage Refinance Calculator to learn how much you could save.

How to find the best mortgage rate in Tennessee for you

Whether you're buying a home or looking to refinance your existing mortgage, it's crucial to get the lowest possible rate. Check your credit report for errors (such as incorrect contact information). If you spot one, reach out to the credit bureau directly to resolve it as soon as possible. Beyond that, you can improve your credit score by paying all of your bills on time and paying down or eliminating credit card debt. Lowering other forms of debt, too, helps improve your debt-to-income (DTI) ratio.
It's easier to get a lower rate if you can make a larger down payment, as well, ideally 20 percent. A lower down payment won't necessarily disqualify you, but you'll likely have a higher rate and will need to pay for mortgage insurance.
Remember: You could save thousands on your Tennessee home purchase if you shop around with at least three mortgage lenders.

Mortgage options in Tennessee

No matter which state you plan to buy a home in, there are at least two mortgage options available to the majority of borrowers: conventional loans or FHA loans. These are offered by most mortgage lenders.
The more popular conventional loan is ideal for borrowers who have a credit score of at least 620 and can put down at least 3 percent of the home's purchase price upfront.
FHA loans, on the other hand, are open to borrowers with credit scores as low as 580 who can make a down payment of at least 3.5 percent. (If you can bring at least 10 percent to the table, your credit score can be as low as 500.)
In Tennessee and elsewhere, certain borrowers might have access to a VA loan or a USDA loan instead. VA loans are for eligible military members and veterans, while USDA loans are for borrowers buying a home in a specially-designated rural area. Neither of these loans require a down payment, making them an attractive option for those who qualify.

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 the Brave: In terms of features, the Homeownership for the Brave program 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 credit score requirement of 640. Interest rates through Homeownership for the Brave 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-backed loan.
  • Take Credit MCC Program: One more notable program for those home shopping in Tennessee, 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.