Washington, DC Mortgage and Refinance Rates

Advertiser Disclosure |
Editorial Policy Disclosure
related category image

Point of Interest

While housing prices and mortgage rates in Washington D.C. are higher than national averages, homeownership in the district may soon become more affordable as housing and lending markets soften due to COVID-19.

Average 30-year Fixed Rate: 3.75%

Use our mortgage calculator to find the right mortgage for your income.

TermRateRate Last Week
30-year fixed3.75%3.82%
15-year fixed3.11%3.12%
5/1 ARM3.38%3.41%
30-year fixed jumbo3.78%3.85%
 

Steeped in rich history, with countless historic buildings and homes from times gone by, Washington, D.C. is a magnet for both property investors and homebuyers alike. The popularity of this area has caused median house prices in the city steadily increase over the past decade, with the local mortgage market thriving, despite having mortgage rates that are higher than the national average.

But’s not just the mortgages that are expensive — the cost of living is also notoriously high in D.C. compared to the rest of the country. In fact, Washington, D.C. was named 4th most expensive U.S. city earlier this year. On the flip side, you can expect a higher income when living and working in D.C., so buying property remains attractive for those who want to enjoy the diversity and culture that the nation’s capital has to offer.

Getting a mortgage in Washington, D.C.

It’s not easy to climb onto the property ladder in this city. The median home price is more than double the national average of $204,900, while the average 30-year fixed rate is almost 20 basis points higher than the national average rate. Since the cost of mortgages is much higher, it’s hardly surprising that the D.C. homeownership rate lags behind the national rate by more than 20%.

There is hope for potential buyers, though. National mortgage rates are on the decline, and according to real estate and rental marketplace Zillow, home values are set to dip before making a recovery over the course of 2021. This could provide a window of opportunity for serious buyers hoping to claim their piece of real estate in the city.

  1. Median home price: $568,400.
  2. Average 30-year fixed rate: 3.75%.
  3. Median monthly mortgage cost: $2,456.
  4. Homeownership rate: 41.8%.

Washington, D.C. state mortgage rate trends

Mortgage rates in Washington, D.C. steadily declined over 12 months starting at the end of 2018. They began rising sharply again in early 2020 before the effects of COVID-19 took hold. There was a similar trend for refinancing rates. Relative to the 15-year fixed-rate and the 5/1 adjustable-rate mortgages, the 30-year fixed-rate mortgage rates have been more volatile and experienced bigger rises and falls over the same time period.

Overall, Washington, D.C. mortgage rates have fluctuated in line with national mortgage rates over the past two years.

Washington, D.C. state current mortgage rates

The current 30-year fixed rate of 3.75% in Washington, D.C. is higher than the national average of 3.57%. The 15-year fixed rate of 3.11% is consistent with this and greater than the national average of 2.88%. The 5/1 adjustable-mortgage rate of 3.38% in Washington D.C. is 0.11% more than the national rate.

Washington, D.C. mortgage rates for new purchases have been on the decline over the past three months. This is true for 30-year and 15-year fixed mortgages as well as adjustable-rate mortgages. When you look at the refinancing rates over the same period, you’ll see a similar picture. The fallout from the pandemic is undoubtedly the main factor, and the uncertainty going forward as states reopen could cause the downward trend to continue.

Most and least expensive places to live in Washington, D.C.

The following is a list of the most and least expensive places to live in Washington, D.C., ranked according to their median home value on Zillow. 

5 most expensive

  1. Berkley ($1.86 million median home value) — Tucked away in northwest D.C., the cost of healthcare, utilities and transportation in Berkley are actually cheaper than D.C. on average.
  2. Kalorama ($1.49 million median home value) — This neighborhood is known as the home of the powerful and the elite, and the prices reflect that.
  3. Georgetown ($1.39 million median home value) — Georgetown is a historic neighborhood with lots to see and do for residents and tourists alike.
  4. The Palisades ($1.22 million median home value) — Famous for its July 4th parade, Palisades is located Northwest of Georgetown University and is one of the most pricey areas of D.C. to buy in.
  5. Foxhall Village ($1.15 million median home value) — Foxhall Village is home to a good mix of bars, restaurants and parks — and some pretty expensive housing.

5 least expensive

  1. Deanwood ($364,000 median home value) — This neighborhood is notable for its housing affordability and a large number of parks.
  2. Anacostia ($417,000 median home value) — Located east of the Anacostia River, the neighborhood is quiet and residential.
  3. Foggy Bottom ($445,000 median home value) — Foggy Bottom is popular with students and young professionals, as it offers a vibrant nightlife.
  4. Fort Totten ($515,000 median home value) — Fort Trotten is a quiet and residential neighborhood that’s relatively affordable, at least compared to the rest of D.C.
  5. Brentwood ($530,000 median home value) — Also popular with young professionals, Brentwood offers peace and quiet relative to the more active D.C. neighborhoods.

Washington, D.C. state mortgage resources and intricacies

If you’re looking to finance a D.C. home purchase with a mortgage, there are some great resources to get you up to speed with the local lending and housing market. The D.C. Housing Finance Agency (DCHFA) hosts homebuyer informational sessions to explain the house-buying process, while the Department of Housing and Urban Development (HUD) website offers handy advice on how to steer clear of predatory lenders and also details borrowers’ rights.

In terms of property taxes, the tax rate for residential properties in Washington, D.C. is $0.85 per $100 of assessed property value. However, owner-occupants in the district could be eligible for a Homestead deduction, which reduces a property’s assessed value by $75,700 (translating to savings of $643.45). Details about this deduction can be found on the Office of Tax and Revenue website.

Like buying a home in most other areas, getting a mortgage in Washington, D.C., involves some common lending fees. These often include fees for the application, document preparation, appraisal, underwriting and survey or inspection. Some of these fees will need to be paid upfront while others are added to the mortgage.

The final word

It’s expensive to buy a home in Washington, D.C. Not only are home values excruciatingly high, but mortgage rates and costs of living are both more than the national average. House prices are expected to fall, though, and mortgage rates are set to remain lower for a while from the effects of COVID-19, so there may be a window of opportunity for serious buyers to benefit from lower mortgage costs and cheaper house prices.

Kristie Kwok

Personal Finance Contributor

Kristie Kwok is a finance content writer with in-depth knowledge of the banking industry from her previous work experience in banks such as UBS, Lloyds Banking Group and Royal Bank of Scotland. She is a qualified accountant with a Bachelor of Commerce degree, specializing in Accounting and Finance.