Mortgage rates in Indiana and factors that affect them

Quick insights

• Mortgage rates change frequently, and there are many ways to find rates. One way to get the most up-to-date rates where you want to buy a home, search for the current mortgage rates in Indiana by zip code.
• A low interest rate can help make buying a home more affordable, as this rate can partially determine your monthly costs and lifetime costs for your home.
• There are several factors which influence the mortgage rates in Indiana and country-wide, including the type of mortgage, decisions made by the federal reserve and real estate market conditions.

For those looking to buy a home in Indiana soon, current mortgage rates are sure to be a major point of attention. After all, the interest rate you ultimately get for your home loan can make a big difference in terms of both monthly payments and lifetime costs. As a homebuyer, it’s important to understand the many factors that influence current rates, including what personal factors may affect your rate. In this article, we’ll clarify these factors and point you toward current mortgage rates in Indiana.

How to find mortgage rates in Indiana

Mortgage rates vary across Indiana’s many cities and towns. Several resources are available around the web. For example, search by zip code to find current mortgage rates where you want to buy a home. We update our interest rate table every day, Monday through Friday. Our mortgage calculator offers another way to view an estimated rate and monthly payment. Bear in mind, mortgage refinance ratesrefinance-hl000061 tend to be different from mortgage rates.

Getting preapproved for a mortgage can be a good step toward getting personalized and specific mortgage terms for your homebuying journey. You can also discuss your situation and loan options directly with a Home Lending Advisor in Indiana.

U.S. mortgage rate trends

While current 30-year mortgage rates have been between 5% and 10%, the annual averages since 1971 have ranged greatly:ec-30-year-fixed-rate-ma

• 1974: 9.19%
• 1982: 16.04%
• 1990: 10.13%
• 1998: 6.94%
• 2006: 6.41%
• 2014: 4.17%
• 2020: 3.11%
• 2024: 6.72%

How mortgage rates are set by lenders

There are broader trends influencing all applicants’ mortgage rates and personal factors that affect the rates you qualify for with a specific lender.

Market conditions

The U.S. Federal Reserve, also known as “the Fed,” can influence the broader rate environment by making changes to the federal funds rate. Adjusting this rate is one way the Fed works to stimulate or steady the economy. When this rate is higher, borrowing costs increase for banks, which typically leads to mortgage rates rising for consumers. For those looking to time their home purchase with favorable rates, paying attention to news from the Fed can be informative.

Personal finances

Lenders use the information provided during your application to assess your potential behavior as a borrower. From a lender’s perspective, lending money presents a risk, and they will use your application to determine how likely you are to repay the loan. Details considered may include:

• Credit score: Your history of credit use, represented by a numerical score, can be used to gauge how likely you are to make monthly payments for a mortgage. Having a high credit score can make an applicant appear more “creditworthy,” or likely to repay, leading to less risk and lower interest rates with a lender.
• Debt-to-income (DTI) ratio: Bank statements are often requested by lenders to assess your ongoing debt commitments. DTI can be calculated by comparing recurring debts (such as car payments or credit card bills) to your income. With a high DTI ratio, you may be presented with higher interest rates when applying for a loan.
• Down payment: Making a larger down payment reduces the overall loan amount, which may decrease the risk to the lender and lead to lower interest rates. On the other hand, making a small down payment may result in higher interest rates for the same purchase.
• Income: Your income could play a role in the rates a lender offers you. A person with higher income may be approved for lower rates than someone earning less, but this isn’t always the case. Lenders may also consider the regularity and nature of your income source, not the amount exclusively.

Rates across different mortgage types

Different types of mortgages come with unique features and terms, which may affect the way interest rates are applied and expressed. A few common mortgage types include:

• Fixed-rate loans: Fixed-rate loans have a single interest rate that remains consistent throughout the lifetime of the loan.
• Adjustable-rate mortgages (ARMs): ARMs typically begin with a fixed introductory interest rate period before transitioning to an adjustable interest rate, updated periodically to reflect market changes.
• Federal Housing Administration (FHA) loans: FHA loans are insured by the federal government and often provide lower interest rates than conventional loans.
• Veteran’s Affairs (VA) loans: VA loans, also insured by the federal government, are intended to help veterans and active-duty servicemembers get affordable rates and terms.
• Jumbo loans: Jumbo loans are mortgages that are larger in size than a conforming loan. Because of their size, they often have higher interest rates.

How rates affect affordability in Indiana

While interest rates aren't typically the primary focus for homebuyers, they’re often a priority. This is because even a slight difference in rate can make an impact on affordability. For example, a $240,000 loan with a 20% down payment and 30-year term could have very different costs depending on your interest rate:

• With a 6% interest rate: Estimated monthly costs would be $1,150, with a total cost of $414,410 over the lifetime of the loan.
• With an 8% interest rate: Estimated monthly costs would be $1,410, with a total cost of $506,170 over the lifetime of the loan.

These are just approximate examples showing how various terms can affect your mortgage costs. You may find it useful to experiment with a mortgage affordability calculator. Entering your own figures into the tool (and tweaking them) could teach you how different variables interact, not only what’s most affordable for you.

In summary

The average mortgage rate in Indiana updates on a regular basis. For the most up-to-date and relevant information, search by zip code to find rates in the area you want to buy a home in. It can also be beneficial to connect with a local Chase Home Lending Advisor who can discuss your mortgage options with you.