Point of Interest
Montana may have higher mortgage rates than the national average, but owning a home in this state can be more affordable than many other states due to cheaper property prices and lower homeownership costs.
Montana is a great place to live if you’re a nature lover: You can hike among ancient cedars, fly fish in the Yellowstone River, ski at the Montana Snowbowl or enjoy one of the many other outdoor activities the state has to offer.
There tons of other reasons to make the Big Sky Country your home, too. For starters, its low population density offers tons of space to rural homeowners, and there are fantastic higher education institutions and buzzing college towns, too. The state is even gaining a reputation as a high tech hub — meaning there are also business opportunities for budding entrepreneurs.
The growth of Montana’s economy has fuelled a steady increase of the state’s median home values over the past decade. Still, the Montana mortgage market is thriving despite the increase in home values and mortgage rates that are higher than the national average. Part of the draw is that homeownership costs per month are lower than many other states in the country, so buying a property in Montana remains highly attractive.
Getting a mortgage in Montana
Right now, 30-year fixed-rate home loans in Montana have an average interest rate of 3.91% and 15-year fixed-rate home loans are at 3.38% on average. That means Montana’s mortgage rates are comparatively more expensive than the national rate of 3.52% and 2.84%, respectively. However, the state has a median home price of $219,600, which is close to the national median. The homeownership rate across Montana is 3.9% higher than the national rate, likely due to other homeownership costs being more affordable in this state.
Owning a home in Montana may be even more achievable with national mortgage rates on the decline, as the state’s rates are expected to follow a similar trend. Plus, real estate and rental marketplace Zillow predicts that home values in Montana will fall by 1.4% to March 2021 due to the effects of COVID-19.
- Median home price: $219,600
- Average 30-year fixed rate: 3.91%
- Median monthly mortgage cost: $1,386
- Homeownership rate: 67.7%
Montana state mortgage rate trends
Mortgage rates in Montana experienced a steady decline over a period of approximately 12 months starting at the end of 2018. Rates began an upward trend in early 2020, before the effects of COVID-19 were felt. This pattern of movement holds for 30-year fixed term, 15-year fixed term, 5/1 adjustable ARM and refinancing rates.
Overall, Montana state mortgage rates have fluctuated in line with national mortgage rates over the past two years.
Montana state current mortgage rates
The current 30-year fixed rate of 3.91% in Montana is higher than the national average of 3.52%. The 30-year refinance rate is 3 basis points lower than the purchase rate at 3.88%. The 15-year fixed rate of 3.38% is higher than the national average, and the 5/1 adjustable-mortgage rate of 3.5% is also higher than the national rate.
Due to the ongoing economic uncertainty from COVID-19, Montana state mortgage rates for new home purchases have declined steadily over the past three months. This is true for 30-year and 15-year fixed mortgages, as well as adjustable-rate mortgages. Refinancing rates tell a similar story.
Most and least expensive places to live in Montana
The following is a list of the most and least expensive counties to live in Montana, ranked according to their median home value on Zillow.
5 most expensive
- Gallatin County (median home price of $456K) — Home to popular places like Bozeman and Belgrade, this county attracts many young professionals and families.
- Madison County (median home price of $376K) — Madison County has a mix of rural and suburban feel with great public schools in towns like Sheridan and Ennis.
- Park County (median home price of $353K) — Park County boasts mountain ranges and vibrant towns like Livingston, where you’ll find many restaurants, shops and parks.
- Missoula County (median home price of $348K) — Home to the University of Montana and highly rated public schools, Missoula is a magnet for college students and young families.
- Flathead County (median home price of $352K) — With lots of bars and good skiing, Flathead County has plenty to keep residents busy.
5 least expensive
- Glacier County (median home price of $100k) — Glacier County has a diverse population and boasts mountain ranges and open plains.
- Pondera County (median home price of $141k) — Located in Central Montana and part of the Golden Triangle, many young professionals live in Pondera.
- Silver Bow County (median home price of $145K) — Silver Bow County is home to the large township of Butte, where there are lots of bars and parks.
- Chouteau County (median home price of $147k) — Many young professionals and retirees live in the Chouteau. It also has good public schools.
- Powell County (median home price of $173k) — Powell County is great for small-town living with close-knit communities in Deer Lodge and Elliston.
Montana state mortgage resources and intricacies
There are some useful things to note about taking out a mortgage in Montana. For instance, Montana doesn’t charge a transfer tax on real estate, which could lead to a sizeable cost saving for homebuyers. Mortgage holders can also potentially deduct their home loan interest from their taxable income.
Another advantage for mortgage holders has to do with foreclosures: If your home in Montana is subject to foreclosure and the sale proceeds are insufficient to settle your outstanding mortgage, creditors cannot put a claim on your other assets to satisfy the debt.
However, when you’re looking for a suitable property, be aware that the state has less stringent requirements for seller disclosures than other states. This means an in-person inspection is crucial to establish the building’s overall health.
In terms of conforming loan limits, every county in Montana has a limit of $510,400.
If you’re after a useful mortgage and home purchasing resource, the Montana Board of Housing website is worth a look. Montana Housing partners with local organizations and leverages federal housing funds to provide access to affordable and sustainable homes. You’ll find information on things like downpayment assistance, housing assistance programs and educational topics for those looking to buy in the state.
The final word
Owning a home in Montana is more affordable than it is in many other states. Home values are generally more reasonable and there are no taxes on property transfers to worry about. With expectations that house prices will dip and mortgage rates will remain lower in the near term, serious buyers may find now a great time to make a purchase.