Today's Mortgage Rates in California

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What Affects Mortgage Rates in California

Mortgage interest rates in California are a combination of your unique financial situation and broader economic factors.

The rates on this page are a starting point, but your personalized rate will reflect both market conditions and your personal situation. It's also worth noting that the interest rate and APR aren't the same. The interest rate affects your monthly principal and interest payment, while the APR includes certain fees.

Mortgage rates stem from a combination of broader economic factors and your personal circumstances, including:

Federal Reserve policy and inflation: Mortgage rates tend to rise when inflation is high or the Fed signals it plans to keep borrowing costs tight. When inflation slows and the Fed becomes less aggressive, rates can fall.
Economic indicators: The housing and job markets, wage growth, and other economic factors also play a role in shaping investor expectations and lender pricing.
Your situation: Personal factors like your credit score, debt-to-income ratio, down payment, and loan type also affect your final APR.

The rates on this page are based on certain, pre-set loan amounts and credit scores. To get a personalized rate that reflects both current economic conditions and your personal circumstances, you can connect with an experienced loan officer.

Types of Mortgages Available in California

Californians looking to buy a home have a wide range of loans. Whether you're using a jumbo loan to buy a high-value house in Orange County or purchasing a home in a rural northern California community, you have access to a number of different options to meet your needs:

Conventional Fixed-Rate Mortgages: Conventional loans conform to Fannie Mae and Freddie Mac guidelines for underwriting and loan amounts. They typically require a credit score of at least 620 and a debt-to-income (DTI) ratio under 43-45%. The minimum down payment for a conventional home ranges between 3-5% depending on borrower qualifications. These loans have a fixed rate, meaning the interest rate remains the same for the entire loan term, usually 15 or 30 years. Private mortgage insurance (PMI) is usually required if your down payment is less than 20%, but it can usually be canceled once you gain enough equity.
FHA Loans: Backed by the Federal Housing Administration, these loans have more flexible credit score and down payment requirements than most conventional loans. If you have a credit score of 580 or higher, you might qualify with a down payment as little as 3.5%. for borrowers with lower credit scores or smaller down payments. Mortgage insurance premiums (MIP) are required regardless of down payment size. That includes an upfront premium and ongoing monthly payments. If you have a down payment of less than 10%, MIP typically lasts for the life of the loan unless you refinance into a conventional mortgage. If your down payment is 10% or higher, your MIP will end after 11 years.
VA Loans: VA loans generally don't require private mortgage insurance or down payments, but are only available to eligible veterans, active-duty service members, and surviving spouses. VA loans do require a one-time VA funding fee, but that can be financed. Some veterans, like those with disabilities related to their service, aren't required to pay the funding fee.
Jumbo Loans: Jumbo loans are mortgages that exceed conforming loan limits, and generally come with stricter underwriting requirements. Conforming limits are higher in high-cost counties, like Los Angeles and Orange counties, so a loan that might be a jumbo in other states might still be within conforming limits in some parts of California.
Adjustable-Rate Mortgages (ARMs): Adjustable-rate mortgages usually have a period of fixed interest rates, usually between 5 and 7 years, before the rate periodically adjusts. A 7/1 ARM, for example, means seven years of a fixed interest rate followed by period adjustments every year. That means payments can change after the introductory period, but ARMs usually come with rate caps to limit how much they can change. Like other conventional loans, PMI may be required if your down payment is less than 20%.

Refinancing a Mortgage in California

Californians also have access to a number of refinancing options to lower their rate or tap into their home's equity:

Rate-and-term Refinance: This common refinance type replaces your existing mortgage with a new one. That could mean refinancing from an FHA to conventional loan to remove FHA mortgage insurance if you qualify, or refinancing a conventional loan to lower your rate or shorten your payoff timeline.
Cash-out Refinance: This refinance replaces your existing mortgage with a new, larger one and lets you take a portion of your equity out as cash. The amount you can access depends on your home value, how much you still owe, lender loan-to-value limits, and closing costs. Unlike a home equity loan or HELOC, which come as second loans, a cash-out refinance replaces your primary mortgage with a new one.

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Does credit score affect mortgage rates?

Credit score has a major impact on your mortgage rates, with higher credit scores generally meaning lower interest rates.

Your credit score isn't the only thing that affects your mortgage rate, however. Your downpayment, debt-to-income ratio, loan term, and other factors will also affect your rate.

Larger factors, like inflation and the broader economy, also have a major impact on your rate.

How will property taxes in California
affect my mortgage payment?

Property taxes are often included in your mortgage payment as part of an escrow account. If that's the case, it means your lender will collect property tax payments each month and pay the tax bill for you.

Property taxes vary significantly by locality in California, according to the Tax Foundation, but on the whole the state has moderate property taxes.

California has an effective property tax rate of 0.70%, meaning the Golden State has the 32nd-highest state for property taxes as a percentage of a property's value.

It's worth noting that property taxes can vary significantly by municipality, and even though California has a middling property tax rate, you'll be paying that in a state with much higher than average property values.

Homeowners insurance can also affect your mortgage payment if it's bundled into your premium with an escrow account. Your home's location, and whether it's in an area that is affected by natural disasters like floods, plays a major impact on your insurance cost. Details about your home, like its size, age, and condition can also affect your payment.