Point of Interest
Indiana has historical mortgage rates higher than the national average, but home prices are far less than the rest of the country.
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Although current mortgage rates Indiana homeowners tend to receive are higher than in other states, it’s still a great place to purchase a home. The median home value is about $100,000 less than the national average, so you won’t need a big budget to find your dream home. And because of the coronavirus, mortgage and refinance rates in Indiana have reached record lows, so there’s never been a better time to buy a home.
Getting a mortgage in Indiana
Indiana’s median home value is $113,457 less than the national average of $248,857, making it an affordable place to settle down. The Indiana Housing and Community Development Authority also offers inexpensive loans and down payment assistance programs to help residents become homeowners.
Even if you’re a first-time homebuyer with a small budget, you may still be able to buy a home in the Hoosier state. To give you an idea of what your home purchase might cost, we’ve compiled more information about current housing prices and mortgage rates in Indiana:
- Median home price: $135,400
- Average 30-year fixed rate: 3.87%
- Median monthly mortgage cost: $1,130
- Homeownership rate: 68.9%
Indiana mortgage rate trends
Historically, mortgage rates in Indiana have been higher than the national average by a few basis points. And the current mortgage rates Indiana homeowners pay still follow the same national trends. In 1981, the average rate for a 30-year fixed mortgage reached a high of 18.53% and has steadily declined ever since, making homeownership more affordable for residents.
In 2012, interest rates reached an all-time low of 3.32%, a record that was recently broken due to the coronavirus.
Indiana current mortgage rates
In March, the Federal Reserve slashed interest rates in response to the coronavirus. This caused national mortgage rates to drop to 3.29%, a record low. Current mortgage rates Indiana homeowners pay also fell to just 3.15%, which is the lowest they’ve ever been. While the average mortgage rate in Indiana has increased since then, it’s still a great time to refinance your home to pay it off quicker or purchase a new one. The current rate for a 30-year fixed-rate loan is 3.46%, which is more than 20 basis points lower than it was at the beginning of this year. You can use a mortgage calculator to estimate your savings.
Most and least expensive places to live in Indiana
Although homes in Indiana are pretty affordable, some counties are more expensive than others. Counties that have excellent school systems and are close to major cities tend to have higher housing prices. For example, Porter County is an hour away from Chicago and has an average home value of nearly $180,000, which may be beyond reach for buyers with low-to-moderate incomes. Some counties also have higher than average property taxes, which raises the cost of owning a home there even more.
5 most expensive places to live
- Hamilton County has an exceptional school system and a short 40-minute commute to Indianapolis. Homes in this area go for $249,400 on average.
- Boone County has low crime rates, excellent schools, and a 35-minute commute to downtown Indianapolis. The average home costs $222,500.
- Hendricks County is one of the largest counties in Indiana. The median household income is $78,355, and homes cost around $180,000.
- Porter County is located just an hour away from both Chicago and South Bend. The median home value in this area is $178,100.
- Monroe County is home to Bloomington, one of the biggest cities in the state. The median household income in this area is $47,075, making it difficult to afford the average home price of $167,900.
5 least expensive places to live
- Blackford County has a median home value of $71,300, which is $64,100 less than the state average.
- Vermillion County has low housing costs. The average household makes $48,377 per year and only pays $885 for their mortgage each month.
- Randolph County has a small-town feel and an affordable median home value of $79,600 — $55,800 less than the state average.
- Jay County is located just an hour and a half away from Carmel. On average, monthly mortgage payments cost $899.
- Miami County is just an hour away from South Bend and Fort Wayne. On average, you can expect to pay $87,200 for a house in this area.
Indiana mortgage resources and intricacies
Housing prices and mortgage rates in Indiana are already low, but the state offers several programs that can make buying a home even more affordable. The Home Solution program provides down payment assistance of up to 6% for first-time homebuyers, veterans, and people purchasing homes in certain low-income areas. Another down payment program called Next Home is open to repeat buyers and offers assistance by up to 3.5%.
Compared to other states, Indiana also has relatively low taxes. The state doesn’t have a real estate transfer tax, which could save you hundreds or even thousands on your home purchase. Property taxes also tend to be lower, which is good news for homebuyers on a budget.
However, Indiana is one of the only states that doesn’t allow you to deduct mortgage interest on your taxes. If you’re a first-time homebuyer with a low-to-moderate income, you may still be able to get a break on your taxes by applying for the Mortgage Credit Certificate Program.
It gives you a credit of up to $2,000 per year, depending on how much mortgage interest you’ve paid. Another great thing about purchasing a home in Indiana is that it isn’t a buyer beware state. The home seller must provide you with a list of the house’s known problems. Although you’ll still need a home inspection, the list may prevent you from running into expensive issues down the road and give you peace of mind as you close on your home.
The final word
If you’ve been thinking about buying a new home or refinancing your current one, now is a great time to do it. Mortgage rates Indiana homeowners can enjoy are at near-historic lows. Locking in your interest rate now could save you thousands of dollars over the life of your loan.