How do Mortgage Rates Vary by State?

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Point of Interest

Mortgage rates vary from state to state based on a number of factors, including the market volatility, foreclosures, operational costs and the effects that local laws and taxes have on each lender.

Mortgage rates is a term that refers to the interest costs associated with taking out a home loan. While the average mortgage rates are relatively similar across the country, different states will have higher or lower rates depending on a host of factors.

If you’re set on moving to a particular state, this might not have a big impact on you. However, if you’re deciding between a few different locations, the mortgage rates by state could have a dramatic impact on where you choose to buy.

Why do mortgage rates vary?

Mortgage rate variation starts at the national level, works down to the state level and then the individual (you) level. National mortgage rates are affected by macro-economic forces, national laws and the overall health of the economy. Generally, these changes affect each state in a similar manner. 

On a national level, you’ll see mortgage rate variations from state to state due to several factors. First, the volatility of the market in terms of foreclosures plays a big role. If the market within the state is riskier to the lender with more foreclosures, the average mortgage rates will likely be higher.

On the flip side, housing markets with lower rates of foreclosures could result in lower rates for borrowers. But if the foreclosure process is longer and more in-depth — i.e. it costs more money — those are added expenses the lender needs to account for.

The second reason for rate variabilities from state to state is due to legal or regulatory differences. The effects of certain laws and regulations can play a role in shaping the national mortgage rates. If a state has laws that raise the cost of doing business for a lender, you can expect those added costs to get passed down to you.

If the wages and taxes employers pay in that state are higher, the cost of doing business goes up. It would be nice to see the lender absorb those costs, but that’s generally not the case. These costs are often passed down to customers via a higher average rate.

The mortgage rates within a state can vary further based on the size of the loan, the type of loan, the lender, the type of property and the financial profile of the borrower.

States with the lowest and highest mortgage rates

If you have some flexibility on where you can buy your next home, you may be interested to know the states that have the highest mortgage rates and the states with the lowest rates. Keep in mind, though, that these trends are just averages. Individual rates could be lower in certain states for certain buyers who qualify for low rates — even if the state has higher average mortgage rates.

It’s best to get prequalification or preapproval from lenders in the areas you’re looking to buy to get the most accurate picture of what you’ll pay for a loan.

Lowest mortgage rates

Many of the lowest mortgage rates in the country can be found in the Midwest and parts of the East Coast. The state with the lowest average rate in the country is Maryland, which has an average of a 3.01% APR for a 30-year fixed-rate mortgage loan. Following closely behind is North Carolina, which has an average of a 3.02% APR on a 30-year fixed-rate loan.

Here are four states with some of the lowest mortgage rates in the nation.


  • Average rate — 3.01% APR
  • Foreclosure rate — 1 in 10,932

North Carolina

  • Average rate — 3.02% APR
  • Foreclosure rate — 1 in 11,868

South Carolina

  • Average rate — 3.08% APR
  • Foreclosure rate — 1 in 7,238


  • Average rate — 3.09% APR
  • Foreclosure rate — 1 in 42,305
  • 4th shortest average foreclosure timeline

*Rates as of 8/13/2020, based on a 30-year fixed mortgage for a borrower with great credit

Highest mortgage rates

Two of the highest mortgage rates in the nation can be found in Hawaii and Alaska. Both of these states are located outside of the continental United States. The third-highest mortgage rate is found on the other side of the country in one of the most expensive places to live in the nation — New York. Not only are mortgage rates higher in the Empire State, but the cost of housing and the cost of living are well above the national average.


  • Average rate — 3.96% APR
  • Foreclosure rate — 1 in 26,777
  • 2nd longest average foreclosure timeline


  • Average rate — 3.96% APR
  • Foreclosure rate — 1 in 28,336

New York

  • Average rate — 3.37% APR
  • Foreclosure rate — 1 in 31,272
  • 7th longest average foreclosure timeline


  • Average rate — 3.27% APR
  • Foreclosure rate — 1 in 39,013
  • 3rd shortest average foreclosure timeline

*Rates as of 8/13/2020, based on a 30-year fixed mortgage for a borrower with great credit.

The final word

For many people, the choice of where to move is dictated by a job, school, family or some other factor that’s out of their control. However, the world has moved into a more digital way of working in response to the COVID-19 pandemic, and many jobs that were once done in-office in a specific geographical area have become remote positions.

This increased flexibility may give some people the ability to pick and choose where they want to live. By knowing which states may cost you more or less on your mortgage, you may be able to get a bigger house, lower payments or more favorable terms on your next home mortgage.

Remember, though, that these rates are just averages. The actual rate a lender may approve you for could be higher or lower, depending on the unique factors and characteristics of your situation.