LendingTree sizes up states with highest and lowest mortgage rates

by Candyd Mendoza13 Feb 2019

California has the lowest average mortgage interest rate in the country, according to a new report by LendingTree.

In the report, LendingTree focused on mortgage interest rates offered to its users in different states. It also tapped into various aspects crucial to the homebuying process including average APRs, loan-to-value ratios, home-loan amounts and down-payment amounts. In order to explain how canvassing for a mortgage can help a potential buyer save a few bucks, the study evaluated the spread between high and low APRs offered to LendingTree’s users.

The key findings of the study revealed that the average offered interest rate nationwide is 4.84%. And the states with the lowest average interest rate are California (4.74%), New Jersey (4.75%), Washington (4.76%) and Massachusetts (4.76%). On the flip side, New York has the highest interest rate at 4.96%), followed by Iowa (4.93%) and Arkansas (4.92%). 

When it comes to down payments, the average across all 50 states is nearly $28,000. The average buyer in West Virginia, the state with the lowest average down payment, will only need to pay about $15,000 for a down payment. Buyers in New York, on the other hand, will need about $43,404 to afford the average down payment.

Mortgage terms can also range differently across the US. A potential homebuyer in one state might have more trouble getting approved for a loan than someone with a similar income and credit profile who lives in another part of the country.

Other key findings include:

  • Across all 50 states, the average offered loan amount is $224,297. The highest average offered loan amount is over $313,000 in California, while the lowest is $186,502 in Oklahoma.
  • The average loan-to-value ratio of nearly 75% goes hand in hand with the average down payment and loan amounts offered throughout the country. The loan-to-value ratio represents how large the mortgage amount is compared with the appraisal price of the home. A low LTV, like those commonly found in Hawaii or California, means that buyers are paying more out of pocket in order to be able to afford a home. Higher LTVs, like those found in Kentucky or Kansas, mean that buyers can get away with smaller down payments.
  • The average APR offered across the U.S. is 4.95%. California is the state with the lowest average APR of 4.83%, while New York is the highest with 5.07%.

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