Mortgage rates in California
Quick insights
- Your mortgage interest rate has a powerful effect on your monthly payments and total loan cost.
- California rates may differ depending on where you’re buying, whether that’s a coastal home in Malibu, a suburban place in Sacramento or a mountain retreat in Lake Tahoe.
- Even small changes in rate percentages can have big impacts, especially in regions where homes might cost more, like San Francisco or Newport Beach.
From beachfront condos in Santa Monica to tech-driven townhomes in the Bay Area and family houses in Orange County, mortgage rates across California can vary. National trends like Federal Reserve policy influence rate movements, but local market conditions can sway the rates available in your area.
Personal finances, from your credit history to the size of your down payment, play a role in determining the rate you’ll be offered. Understanding these factors, not just regional variances, can help you make smarter decisions as you plan your purchase or refinance.
How to find California mortgage rates
Securing a competitive rate in California often starts locally. It also requires strategy, so here are some tips:
- Search by zip code: Use our mortgage rate tool to compare rates in your neighborhood, whether you’re in downtown Los Angeles, Silicon Valley or rural Fresno.
- Check rates each weekday: California’s housing market can see frequent rate updates depending on the broader market. Our mortgage rate charts refresh Monday through Friday to help you stay in the loop.
- Consider refinancing: If you already own a home, check mortgage refinance rates as they may differ from purchase rates. It could be an opportunity to lower your monthly payments or adjust your loan term.
- Talk to a local Home Lending Advisor: A California-based Home Lending Advisor understands how regional trends, like tech job growth or coastal demand, can impact rates.
- Get prequalified or preapproved: Starting the mortgage prequalification or preapproval process can give you an idea of what rate range you’re likely to qualify for and help you approach the market with confidence.
U.S. mortgage rate trends
While mortgage rates shift daily, trends over longer periods can offer helpful context. Here are average 30-year fixed mortgage rates over a few decades:
- 1974: 9.19%
- 1982: 16.04%
- 1990: 10.13%
- 1998: 6.94%
- 2006: 6.41%
- 2014: 4.17%
- 2020: 3.11%
- 2024: 6.72%
Factors affecting mortgage rates in California
Mortgages rates in California are shaped by a blend of national economic forces and local market dynamics. Decisions from the Federal Reserve and broader trends like inflation, employment rates and consumer confidence all contribute to the national interest rate landscape. However, in California, location matters just as much. Demand for tech-adjacent homes in the Bay Area, limited inventory in coastal cities like Santa Barabara and fluctuating prices in places like Sacramento or Riverside can all influence the rate you’re offered.
Personal factors that affect your mortgage rate
Mortgage rates offered by lenders in California are shaped by a mix of personal financial details, not just economic factors. Regardless of the home, from luxury villas in Malibu to starter condos in Sacramento, loan providers assess several details to determine a rate they’ll offer:
- Credit profile: Loan providers usually favor borrowers with high credit scores and strong repayment histories. Missed payments, high credit card balances or recent delinquencies may result in higher costs over the life of your loan.
- Stable income and employment: Mortgage lenders want to see steady, verifiable income over time. Consistent income from a full-time job, self-employment or a long-term contract shows loan providers that you can manage your payments over time.
- Debt-to-income (DTI) ratio: Lenders look closely at how much of your monthly income goes toward existing debt. A lower DTI ratio may suggest that you have more breathing room in your budget, which may help you qualify for better rates.
- Savings and reserves: Having extra funds set aside in savings, retirement accounts or other liquid assets demonstrates financial preparedness. This can help reassure loan providers that you’re equipped to handle unexpected expenses or economic shifts.
- Down payment amount: A larger upfront down payment reduces the loan size and financial risk for loan providers. This can lead to a lower interest rate and may eliminate the need for private mortgage insurance (PMI).
- Property type and use: Rates can vary based on whether the home is a single-family house, condo or multi-unit property, as well as how you intend to use it (primary residence, second home or investment property).
- Loan details: Everything from the length of your mortgage term (like 15 or 30 years) to the loan size (standard vs. jumbo) and the type of loan (conventional, FHA, VA) can affect the final rate in high-cost counties like Los Angeles and San Francisco, jumbo loans are common and may come with stricter approval criteria.
How the economy shapes California mortgage rates
While national financial signals set the macro tone, California’s own market dynamics can amplify or soften their impact. The Federal Reserve's actions—adjustments to the federal funds rate, in particular—can change borrowing costs across the nation. State-level trends, such as job market strength in tech or entertainment, can influence local demand for housing and thereby lender competition and pricing. Inflation and consumer confidence impact mortgage rates everywhere, such as the Bay Area or L.A., where effects might be even more pronounced.
Mortgage rates by loan type in California
Here’s how different mortgage products typically compare in California’s real estate landscape:
- Fixed-rate mortgages: These offer consistent monthly payments over 15, 20 or 30 years, which can be ideal in uncertain markets.
- Adjustable-rate mortgages (ARMs): Thinking of a trying out Sacramento because San Diego feels out of budget? With lower introductory rates, ARMs may appeal if you plan to move or refinance before the rate resets.
- Jumbo loans: California homes could exceed conforming limits. You can expect jumbo loans to require stronger credit, higher down payments and slightly elevated rates, generally speaking.
- Federal Housing Administration (FHA) loans: FHA loans have down payment and credit requirements that can help first-time homebuyers.
- Veteran’s Affairs (VA) loans: Eligible veterans, active-duty servicemembers, and some surviving spouses can apply for VA loans and potentially benefit from no down payment and no PMI. This could be great for homebuyers in California’s military communities like San Diego and Monterey.
How mortgage rates impact affordability in California
Even modest rate increases can have a considerable impact on your budget in California’s higher-priced markets. A 0.25-0.50% rate change can mean hundreds of dollars difference in monthly payments. The term of your mortgage matters, too. A 15-year loan usually comes with a lower interest rate but higher monthly payments, while a 30-year loan spreads out payments over a longer period. It’s important to choose a mortgage term based on your financial strategy and lifestyle.
Using a mortgage affordability calculator or speaking with a California-based Home Lending Advisor to model different scenarios and match them to your budget constraints and homeownership goals. From Riverside to Bakersfield and beyond, buying a home in California could be within reach.
In summary
California’s mortgage rates are shaped by a mix of national financial indicators and finely tuned regional trends. Whether you’re eyeing a new build in Irvine, an urban property in Oakland or a getaway home in Napa, understanding how rates vary—and what factors influence them—is key.
By comparing current offers, consulting a California-based Home Lending Advisor and planning around your personal and regional financial picture, you’ll be empowered to make well-informed decisions and secure a rate that fits your California home journey.
