Iowa Mortgage and Refinance Rates

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Points of Interest

If you’re thinking about buying a home in Iowa, it’s important to know that this state offers home prices much lower than the national average and mortgage rates that are on par with near-historic low rates across the country.

Getting an Iowa mortgage or refinance loan may be easier than in many other states, and low home prices contribute to the ease. Currently, the national mortgage interest rates are at near-historic lows at 3.24%, and mortgage rates Iowa offers are on par with that rate — but can be lower depending on the area or the state. Refinance rates are down as well, but the market in Iowa is currently very hot, so housing prices and the demand for houses will likely go up in the coming years.

Getting a mortgage in Iowa

Getting a mortgage during the pandemic is going to be harder due to mortgage lenders being hesitant to lend money during a hectic time. However, Iowa’s low housing costs make it an interesting choice when you’re considering where to settle down. Across the U.S., houses cost, on average, $248,857, and the average price in Iowa is about $106,000 less, which means you could possibly save a lot of money by buying in Iowa. A mortgage would also be easier to qualify for with the lower housing prices because you don’t have to prove as high of an income.

Mortgage rates in Iowa are also lower than the national average, which allows more people in Iowa to purchase a home than in other states. The nationwide average for homeowners 65.3% of people but is a whopping 71.1% of Iowans. This data suggests that getting a mortgage in Iowa is easier, or perhaps cheaper, than in other states across the nation.

  1. Median home price: $142,300
  2. Average 30-year fixed rate: 3.73%
  3. Median monthly mortgage cost: $1,234
  4. Homeownership rate: 71.1%

Iowa state mortgage rate trends

Iowa mortgage rates have fallen for the past several years. If you had taken out a 30-year fixed loan in Iowa in 2018, your interest rate would be as high as 4.80%. It would have hovered close to 4.2% for 15-year mortgages at its peak. The average rates for a 30-year mortgage in 2020, on the other hand, are about 3.45% and interest rates on 15-year mortgage loans average about 2.75%.

If you had chosen to refinance your mortgage in 2018, your rate for a 30-year fixed-rate mortgage loan would have been almost 5%. For a 15-year fixed-rate mortgage loan the average rate would have been around 4.17%. If you chose to wait two years, on the other hand, you would have gotten an average refinancing rate of about 3.50%. For a 15-year mortgage, it would have been about 2.8%.

Iowa state current mortgage rates

Rates in Iowa are typically on par with the national average — but that average is almost lower than it has ever historically been. You should be able to find an Iowa mortgage right now with rates somewhere between 3.21% and 4.19%. You can expect increased demand by people trying to purchase homes across the country because of the reduced rates, and the low housing prices might draw people to Iowa. If you’re thinking about moving to Iowa, it would be wise to check out a mortgage calculator to see how much it might cost to buy a home.

Furthermore, rates are expected to continue their downslide in the coming year or two. Due to the COVID-19 pandemic, there is a real chance we could see rates reach historic lows.

Most and least expensive places to live in Iowa

Iowa provides lower-than-average housing prices across the state, but as with all states, there are areas that are more expensive than others to reside in. The true cost of living in an area depends on factors like home prices and the income you can expect to make.

5 most expensive places to live in Iowa

  1. Johnson County — This county houses the University of Iowa and Iowa City, and has the highest home price to income ratio in the state.
  2. Story County — The city of Ames, which is located near Des Moines, has the 2nd-highest home price to income ratio in Iowa.
  3. Linn County — This county includes the city of Hiawatha and the 5th-highest home price to income ratio in the state.
  4. Poweshiek County — You’ll find the city of Grinnell in Poweshiek county, as well as the 6th-highest home price to income ratio statewide.
  5. Black Hawk County — This county includes the city of Cedar Falls and has the 9th-highest home price to income ratio statewide.

5 least expensive

  1. Crawford County — This rural county in the central part of the state includes the small city of Denison and has the lowest home price to income ratio in the state.
  2. Hardin County — As a resident of this county, you’ll enjoy access to all that scenic Iowa Falls offers, as well as the 2nd-lowest house price to income ratio statewide.
  3. Page County — Page county, which includes the city of Clarinda, offers both an arts community and the 10th-best home price to income ratio across the state.
  4. Delaware County — This county is located north of Cedar Rapids and offers the 20th-most-affordable home price to income ratio in Iowa.
  5. Jackson County — The city of Maquoketa is housed in this county, which offers residents the 13th-lowest home price to income ratio in the state.

Iowa state mortgage resources and intricacies

The Iowa Mortgage Association is a good resource and a smart starting place for learning about the nuances of getting an Iowa mortgage. Also, the Iowa Finance Authority provides information about buying a home in Iowa. The U.S. Department of Housing and Urban Development offers additional resources that can be useful to future homebuyers.

Iowa’s property taxes are middle of the road compared to the rest of the nation, so remember that when figuring out your monthly payment. However, the application process in Iowa is similar to the rest of the nation, and if you’re a first-time homebuyer, you can look into extra assistance from the FirstHome Program. Plus, the refinancing process in Iowa is similar to other states.

The final word

The current mortgage and refinance rates offered in Iowa make it an appealing state for purchasing a home. Home prices are well below the national average as well, so you can easily find a well-priced home no matter where you decide to settle down here.

Tiffany Verbeck

Personal Finance Contributor

Tiffany Verbeck is a personal finance expert. She uses her storytelling skills gained from a master’s degree in writing to run a freelancing business focused on helping people make and manage their money.