Today's Mortgage Rates in North Carolina

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What Affects Mortgage Rates in North Carolina

Market conditions and your personal situation all play a role in shaping mortgage rates in NC. Details about your loan also affect your final APR.

Keep in mind 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.

Here are some factors that can affect your rate:

Federal Reserve policy and inflation: The Fed's decisions have an influence on mortgage rates. When inflation is high and the Fed tries to cool the economy with aggressive guidance, rates can rise. When inflation softens and the Fed is more relaxed in its guidance, rates can fall.
Economic indicators: Local and national housing and job markets, wages, and other economic factors also play a role in affecting investor expectations and lender pricing.
Your situation: Your credit score, debt-to-income ratio, down payment, closing costs, and details about your loan will 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 North Carolina

From FHA loans with flexible eligibility requirements to jumbo loans for more expensive homes, here are some common mortgage types for North Carolinians:

Conventional Fixed-Rate Mortgages: Fixed-rate mortgages have predictable principle and interest payments through the life of the loan, usually between 15 and 30 years. These 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 is generally 5%, but can be as low as 3% for qualifying borrowers, including many first-time homebuyers. Private mortgage insurance (PMI) is usually unless your down payment is 20% or higher, but it can usually be canceled once you gain enough equity in your home.
Adjustable-Rate Mortgages (ARMs): ARMs start with a period of fixed interest rates in most cases, usually between 5 and 7 years. After that, the rate adjusts based on both a lender-set margin and a benchmark index. A 5/1 ARM, for instance, means five years with a fixed interest rate followed by adjustments every year after that. Rate changes are usually subject to caps in an ARM. Like other conventional loans, PMI may be required if your down payment is less than 20%.
FHA Loans: Backed by the Federal Housing Administration, FHA loans come with flexible credit score and down payment requirements. If your credit score is 580 or higher ,you might qualify with a down payment as low as 3.5%. 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 ends after 11 years.
VA Loans: VA loans are only available to eligible veterans, active-duty service members, and surviving spouses. They feature competitive rates and don't require private mortgage insurance or down payments. 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: These are mortgages that are higher than conforming loan limits. North Carolina counties generally use a baseline conforming loan limit set by the FHFA, but that limit varies year to year. Jumbo loans typically require stricter underwriting, and rates may be higher or lower than conforming loans depending on market conditions and borrower qualifications.

Refinancing a Mortgage in North Carolina

Refinancing can help you lower your rate or shorten your payoff term. Two common options for refinancing in North Carolina are rate-and-term and cash-out refinances.

Rate-and-term Refinance: This replaces your mortgage with a new one. That could mean taking advantage of lower rates, shortening your payoff term, or changing loan types depending on your circumstances.
Cash-out Refinance: A cash-out refinance replaces your existing mortgage with a new, larger loan and lets you take a portion of your equity with cash. The amount of equity you can access depends on your home value, how much you still owe, lender loan-to-value limits, and closing costs. While a home equity loan or HELOC lets you access equity in the form of a second loan, a cash-out refinance replaces your primary mortgage with a new one.

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 and insurance in North Carolina
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. Some loan types, like FHA and VA loans, sometimes require escrow accounts.

North Carolina generally has lower property tax rates than most states, according to the Tax Foundation.

Keep in mind property tax can vary significantly within a state, with urban areas generally higher than those in rural areas.

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.