Today's mortgage and refinance rates in Maryland

Today's mortgage and refinance rates in Maryland

November 20, 2020

Buying a home in Maryland

According to Zillow, the typical home value in Maryland is higher than the typical value of $259,906 across the US. The typical home value in Maryland is $326,553, and Zillow expects it to increase to $348,000 by September 2021.

First-time homebuyer programs in Maryland

You may be eligible for financial assistance through the Maryland Department of Housing and Community Development if you get your mortgage through a participating lender. Here are your options:

  • MMP 1st Time Advantage: Get a 30-year fixed-rate mortgage with a low interest rate. You have three options for the type of assistance you receive — choose the lowest rate with no down payment assistance, get $5,000 toward down payment/closing cost assistance, or receive 3% of your mortgage amount for down payment/closing cost assistance. If you choose to get down payment assistance, you'll pay off the loan once you sell or refinance your home, or when you completely pay off your mortgage.
  • Flex Loans: Your options with a Flex Loan are similar to your options with the MMP 1st Time Advantage program. But you can also choose to get up to a 4% grant toward a down payment or closing costs, which you don't have to repay.
  • Partner Match: If you use the MMP 1st Time Advantage or Flex program, your employer may match your down payment assistance up to $2,500.
  • Maryland SmartBuy: You can get a loan of up to 15% (max $30,000) of your home purchase to pay off student loans, and you must pay off the student loans before closing on the home.

If you live in Baltimore, you may qualify for financial assistance from the Housing Authority of Baltimore City. 

Historic mortgage rates for Maryland

By looking at the average mortgage rates in Maryland since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 5/1 adjustable mortgages:

Seeing how today's rates compare to historic Maryland mortgage rates may help you decide whether you'd be getting a good deal by getting a mortgage or refinancing now.

30-year fixed mortgage rates

You'll pay a higher interest rate on a 30-year fixed mortgage than on a shorter-term fixed-rate mortgage. The 30-year fixed rates used to be higher than adjustable rates, but recently 30-year terms have been the better deal.

Monthly payments are relatively low for a 30-year term, because you're spreading payments out over a longer period of time than you would with a shorter term.

You'll ultimately pay more in interest with a 30-year term than you would for a 15-year mortgage, because a) the rate is higher, and b) you'll be paying interest for longer.

15-year fixed mortgage rates

A 15-year fixed-rate mortgage is more affordable than a 30-year term in the long run. The 15-year rates are lower, and you'll pay off the loan in half the amount of time.

However, your monthly payments will be higher on a 15-year term than a 30-year term. You're paying off the same loan principal in half the time, so you'll pay more every month.

Adjustable mortgage rates

With an adjustable-rate loan, your rate stays the same for the first few years, then changes periodically. For example, your rate is locked in for the first five years on a 5/1 ARM, then your rate increases or decreases once per year.

ARM rates are at all-time lows right now, but a fixed-rate mortgage is still the better deal. The 30-year fixed rates are comparable to or lower than ARM rates. It could be in your best interest to lock in a low rate with a 30-year or 15-year fixed-rate mortgage rather than risk your rate increasing later with an ARM.

If you're considering an ARM, you should still ask your lender about what your individual rates would be if you chose a fixed-rate versus adjustable-rate mortgage.

Refinancing your mortgage in Maryland

Mortgage refinance rates are at all-time lows right now, so it could be a good idea to switch your current mortgage for one with a better interest rate — especially if the new rate would be significantly lower.

You may decide to refinance with the same lender that gave you your initial mortgage, but it's not always the best idea. A different lender may offer you a better deal the second time around. Shop around for a company that will offer the best interest rate and charge relatively low fees.

How to get a low interest rate on your mortgage

Mortgage rates are low in general right now, but there are some ways to score an even lower rate:

  • Save more for a down payment. You may be able to put as little as 3% down on a conventional loan. But lenders reward a higher down payment with a lower interest rate. Mortgage rates should stay low for a while, so you may have time to save more.
  • Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But the higher your score, the better your interest rate may be. The most important factor for boosting your score is to pay all your bills on time.
  • Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less for a conventional mortgage, but a lower DTI can result in a better interest rate. To improve your DTI, pay down debts or look for opportunities to increase your income.
  • Choose a USDA or VA loan. If you're eligible, you might consider a USDA loan (for low-to-moderate income borrowers buying in a rural area) or a VA loan (for military families). These types of mortgages typically come with lower rates than FHA or conventional loans — and you don't need any money for a down payment.

Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.

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