Best Tennessee Mortgage and Refinance Rates for October 2020

Tennessee has the 6th lowest cost of living, 14th least expensive property taxes and the state mortgage rates currently sitting below the national average. Add that to the historically low interest rates and this is a great time to buy or refinance a home in the state.

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Current Tennessee Mortgage Rates

Compare today’s average mortgage rates in the state of Tennessee, based on an aggregated pool of rates from multiple sources.

Product Rate Rate Last Week
30-Year Fixed Rate3.060%3.060%
15-Year Fixed Rate2.540%2.510%
5/1 ARM Rate2.920%2.970%
30-Year Jumbo Mortgage Rate3.040%3.070%
30-Year Fixed Refinance Rate3.300%3.220%

Rates data based on Nashville, Tennessee as of 10/23/2020

Mortgage Rates Trends

In this graph:

On , the APR was for the 30-year fixed rate, for the 15-year fixed rate, and for the 5/1 adjustable-rate mortgage rate. These rates are updated almost every day based on Bankrate’s national survey of mortgage lenders. Toggle between the three rates on the graph and compare today’s rates to what they looked like in the past days.

Note: Not sure how much house you can afford? Use our mortgage calculator to find out.

Mortgage Rates in Tennessee

Shop and compare the best mortgage rates in Tennessee.  Interest.com regularly surveys various sources to bring you current national average mortgage rates and terms.

There’s a lot to be excited about if you’re looking at buying or refinancing a home in Tennessee. Tennessee’s mortgage rates are currently sitting below the national average and have been trending lower over the past two years — and that’s not the only perk to buying a home in this state. Monthly ownership costs and the average home price in the state are both significantly lower than the national average. Combined with the low property taxes and low cost of living, and you’re looking at a great buying opportunity in Tennessee.

Getting a mortgage in Tennessee

Homebuyers looking to enter the Tennessee housing market have a lot of positives to look forward to. First, based on metrics from the most recent Census, the median home price in the state is just under $50,000 lower than the national average. The median monthly ownership cost of owning a home is $1,224, which is about $300 below the national average.

The average homeowner’s insurance cost in the state is the 17th lowest in the country at $1,241. The cost of living in the state is also the 6th lowest in the entire country, based on a study from the World Population Review.

  • Median home price: $158,600
  • Average 30-year fixed rate: 2.99%
  • Median monthly ownership cost: $1,224
  • Homeownership rate: 66.3%

Tennessee state mortgage rate trends

Over the past two years, mortgage rates in the state of Tennessee have declined significantly. While this trend has been seen across the country in recent months due to the COVID-19 pandemic, it has been occurring in Tennessee over the long haul, much to the joy of homebuyers and refinancers.

In late 2018, rates on a 30-year fixed-rate loan averaged just below about 4.90%. Fast-forward to Aug. 2020, and those rates are now sitting comfortably below 3%. All other types of loans and adjustable-rate mortgages in Tennessee have followed the same trend as the 30-year loans.

Tennessee state current mortgage rates

Right now, rates on 30-year fixed-rate loans are slightly below the national average at roughly 2.99%. The actual rate you receive in Tennessee will depend on a number of factors, as well as a host of other creditworthiness and loan-specific details.

The rate for 15-year fixed-rate loans is lower at 2.58%, which is much better than the nearly 4.00% average rate back in May 2020. The rate for 5/1 ARMs is higher at 3.12% as of Aug. 10.

Most and least expensive places to live in Tennessee

Most expensive places to live in Tennessee

  1. Signal Mountain — The cost of living in Signal Mountain is 25% higher than the national average. The biggest factor is housing, which is 106% higher than the average in the rest of the country. The median home price is $714,606, and the median rent is $2,239.
  2. Brentwood — Coming in with a cost of living score 24% higher than the national average is Brentwood. Housing in the city is 36% higher than the national average, with a median home price of $471,249 and a median rent of $1,476 a month.
  3. Germantown — Housing in Germantown is 79% higher than the national average. Median home prices hover around $619,555 and the median rent is about $1,941 in this area. Utilities are also above the national average, with the average energy bill of about $173.03.
  4. Nolensville — At 4% over the national cost of living average, Nolensville is one of the more expensive places to live in Tennessee. While housing costs are less than the national average, it’s still more expensive than most of the state. The current median home price is $324,496 and the median rent is $1,017.
  5. Chattanooga — While the cost of living in the city is still below the national average, it’s only lower by 3%. This makes it way more expensive than many other parts of the state. Housing is 2% over the national average with a median home price of $352,205 and a median rent of $1,103 monthly.

Least expensive places to live in Tennessee

  1. Knoxville — Housing, utility, grocery and transportation costs in Knoxville are all well below the national average for cost of living. Overall, the cost of living is 18% lower than the national average. The median home price in Knoxville is $249,146, and the median rent is $780.47.
  2. Memphis —– Memphis is 17% below the national cost of living average, with the lowest costs coming in housing. The median home price in the city is $228,326 and the median rent is $715.25.
  3. Shelbyville — One of the least expensive cities in the state is Shelbyville. The median value of a home in the area is only $115,900. The gross median rent over the past few years is $759. The average monthly homeownership costs are $976.
  4. Millington — When it comes to the cost of living in Millington, it is about 16% below the national average. Housing alone is 25% below the national average. The median home price is $258,836 and the median rent is $810.82.
  5. Clinton — The cost of living in Clinton comes in well below the national average, with the lowest costs being housing and transportation. The median home price in the area is $267,219 and the median rent in the town is $837.08.

Tennessee state mortgage resources and intricacies

Multiple resources exist for buyers looking to get a mortgage in the state of Tennessee. Two great starting points are the Tennessee Housing Development Agency and the HUD website specific for the state. Realtors and mortgage brokers who are licensed to operate in the state can be a great resource to answer your questions on specific nuances of Tennessee mortgages, refinancing and buying a home in the state.

When it comes to property taxes in Tennessee, you’ll be pleased to know the state has the 9th least expensive effective property tax rate. The effective tax rate is 0.68%, but be mindful that these rates will change based on the county and city you choose to buy your home in.

The final word

If you’re deciding whether to buy or refinance a home in the Volunteer State, this may be the right time, but it will depend on your financial situation. The attractive cost of living, property taxes, mortgage rates and cost of homeownership should all be factors you consider if Tennessee is on your radar for a future home purchase.

Jason Lee

Personal Finance Contributor

Jason Lee is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.