Mortgage rates in Illinois

Quick insights

• Your mortgage interest rate directly impacts both your monthly payments and the total cost of your home over time.
• In Illinois, rates can vary based on factors like loan type, your credit profile, housing supply and demand, and broader economic trends such as inflation and job growth. 
• Whether you’re searching for a modern condo in the Chicago Loop, a classic walk-up in Lincoln Park or a quieter space in in Champaign, rates can shift quickly, so it’s helpful to keep an eye on local updates.

Illinois offers a wide range of real estate options, from vintage brownstones in Chicago neighborhoods like Hyde Park or Logan Square to newer builds in Naperville and Aurora. Because of this variety, mortgage rates can differ depending on market trends, neighborhood demand and even local employment patterns.

In this article, we’ll explore how mortgage rates are shaped in Illinois, what influences them most and how to find the latest information.

How to find Illinois mortgage rates

Finding a competitive mortgage rate in Illinois takes a bit of research, but the effort can pay off. Since rates can vary by city, neighborhood and even loan provider, taking a more personalized approach can help you make a more informed decision. Here’s how to start:

• Search by zip code: Use our online rate finder to check current mortgage rates offers in your area. Just enter the five-digit zip code where you plan to buy, whether that’s in the heart of downtown Chicago, the North Shore suburbs or quieter towns like Peoria or Rockford.
• Check rates regularly: Mortgage rates can change daily based on market conditions. Our mortgage rate chart is updated on weekdays to help you stay current and avoid surprises as you prepare to buy or refinance.ec-refinance-hl000061
• Explore refinance opportunities: Refinance rates can differ from purchase rates. Visit our mortgage refinance rates page to see if a better rate could help lower your monthly payment or reduce your loan term.
• Talk with a Home Lending Advisor: An Illinois-based Home Lending Advisor can walk you through local rate trends, explain what influences your rate and help you find the right loan option for your goals.
• Get prequalified or preapproved: Starting the mortgage prequalificationchase-prequalification or preapproval process can gives you a clearer picture of what rate range you might qualify for, and helps you shop with more confidence.

U.S. mortgage rate trends

Current 30-year mortgage rates have been between 5% and 10%, while annual averages of have ranged more broadly over the decades:30yr-fixed-mortgage-average-25

• 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 Illinois

Mortgages rates in Illinois are shaped by a combination of national economic trends and your individual financial profile. While the Federal Reserve and inflation rates influence the broader interest rate environment, local housing dynamics —from the Chicago Loop to the suburbs of Springfield and Schaumburg—can also affect what rate you receive.

What impacts your mortgage rate in Illinois?

Your finances picture carries a lot of weight when it comes to the mortgage rate you’ll be offered. While national interest rate trends set the overall tone, loan providers also zoom in on your unique financial details to determine how risky (or reliable) you are as a borrower. Some of the factors that can impact your mortgage rate include credit history, income stability and the size of your down payment. 

If you’re house-hunting in Illinois, here are some key factors that could shape your interest rate:

• Credit profile: A higher credit score and a clean payment history can signal that you’re a low—risk borrower, which may translate to more favorable rate. Missed payments or high credit utilization may lead to higher interest costs.
• Income stability: Regular, reliable income—whether from a salaried or a long-term—demonstrates consistency. Loan providers want to know you can comfortable handle monthly payments over time.
• Debt-to-income ratio: Your debt-to-income (DTI) ratio shows how much of your income goes toward existing debts. A lower DTI may suggest that you have more financial bandwidth, which could help you qualify for better rates.
• Cash reserves: Lenders may give more favorable terms if you have cash reserves, such as emergency savings or investment accounts. These assets show you’re better equipped to handle unexpected costs.
• Down payment amount: The more you can contribute upfront, the less the mortgage lender needs to finance. A larger down payment often leads to a better rate and could help you avoid private mortgage insurance (PMI).
• Loan details: Mortgage providers will also look at the home’s price, how you plan to use the property (as a primary residence, second home or investment), the length of the loan and the type of mortgage (such as FHA or conventional). Each of these elements play a key role in shaping your final rate.

How the economy shapes mortgage rates in Illinois

Mortgage rates in Illinois are largely influenced by national economic conditions, even if you’re buying a home right in the heart of the Chicago Loop or in a family-friendly suburb. One of the most important drivers is the U.S. Federal Reserve (commonly referred to as “the Fed”). When the Fed raises or lowers the federal funds rate (the rate banks charge each other for short-term loans), loan providers typically follow by adjusting the rates they offer to borrowers. 

Mortgage rates by loan type in Illinois

The type of mortgage you choose can have a significant impact on the interest rate you’re offered. Each loan option comes with unique features that may better suit different financial goals or housing plans across Illinois:

• Fixed-rate mortgages: With this loan, your interest rate stays the same for the full term—typically 15, 20 or 30 years. This can be a great choice if you value stable monthly payments and plan to stay in your home long-term, whether it’s a two-flat in Logan Square or a house in Orland Park.
• Adjustable-rate mortgages (ARMs): ARMs  generally start with a lower fixed rate for a set period (such as 5, 7 or 10 years), after which the rate adjusts based on market conditions. These loans might appeal to homebuyers who expect to move, sell or refinance before the adjustable period begins.
• Jumbo loans: If you’re buying a higher-priced home that exceeds Illinois’ conforming loan limits, common in neighborhoods like Lincoln Park or Highland Park, you may need a jumbo loan. These loans often come with stricter qualification requirements and may have slightly higher rates due to the larger loan amount.
• Federal Housing Administration (FHA) loans: Backed by the Federal Housing Administration, FHA loans are popular among first-time homebuyers or those with modest savings, smaller down payments or credit challenges. They often offer lower rates and more flexible approval standards. 
• Veteran’s Affairs (VA) loans: Reserved for eligible veterans and active-duty service members and some surviving spouses, VA loans are supported by the U.S. Department of Veterans Affairs. VA loans typically offer competitive rates, no down payment and no private mortgage insurance (PMI). They may be a strong option for qualifying buyers in Illinois.

How mortgage rates impact affordability in Illinois

Mortgage rates are one of the biggest factors in how much home you can afford. Even a small shift in rates can substantially change your monthly payment and the total amount you pay over the life of your loan. The length of your loan also matters because shorter terms like a 15-year mortgage usually come with lower interest rates but higher monthly payments, while a 30-year mortgage spreads payments out but results in more interest paid over time.

Using tools like a mortgage affordability calculator or talking with an Illinois-based Home Lending Advisor can help you see how current rates match up with your financial goals, from downtown high-rises to tree-lined suburban neighborhoods.

Interest rate example

Let’s say the price of the home is $283,000. A 20% down payment on a $283,000 loan is $56,600. Therefore, the loan amount after the down payment would be $226,400 ($283,000 – $56,600). 

Here’s how the monthly mortgage principal and interest payment is calculated: 

Formula: M = P[r(1+r)^n]/[(1+r)^n – 1]

• M is your monthly payment.
• P is the principal loan amount (purchase price minus down payment).
• R is your monthly interest rate (annual interest rate divided by 12).
• N is number of payments (months you will be paying the loan).

With some sample calculations using the formula above, assuming a 20% down payment. you can see how the interest affects the payment and total costs:

• With a 6% interest rate: Estimated monthly costs would be $1,360 with a total cost of $488,700 over the lifetime of the loan. The total interest would be approximately $262,300.
• With a 7% interest rate: Estimated monthly costs would be $1,506 with a total cost of about $542,200 over the lifetime of the loan. The total interest would be approximately $315,900.

In summary

Planning to purchase a home in the Chicago Loop or refinance in the suburbs? Working with an Illinois-based Home Lending Advisor can help you navigate current mortgage rates, explore your loan options and create a plan that supports your financial goals. With personalized guidance and local market insight, you’ll be equipped to move forward confidently.