Mortgage rates in Michigan

Quick insights

• The interest rate on your mortgage affects your monthly payments and how much you’ll ultimately spend on your home over the life of the loan.
• In Michigan, mortgage rates can vary depending on several factors including the loan type, your financial profile, local housing demand and national economic shifts like inflation.
• Rates can shift quickly, so it may be a good idea to keep an eye on market updates, especially in your area—whether you’re planning to settle in a bustling city like Detroit or looking for peace and quiet in the Upper Peninsula.

From lakefront cottages in Traverse City to historic homes in Ann Arbor and family-friendly suburbs around Grand Rapids, Michigan offers a diverse mix of properties. This variety means mortgage rates can differ by region, neighborhood and property type. Local inventory levels, competition among homebuyers and even local job markets all factor into the rate you might receive.

In this article, we’ll break down how mortgage rates work in Michigan, the key factors that influence them, and where to find up-to-date rate info as you move forward buying or refinancingrefinance-hl000061refinance-hl000061 your home.

How to find Michigan mortgage rates

Finding a competitive mortgage rate in Michigan means doing a little homework, but it’s worth it. Because rates can vary from city to city and even between neighborhoods, a targeted approach may help you make smarter financial decisions. Here’s how to get started:

• Search by zip code: Use our online rate finder to check current mortgage rates offers in your specific area. Just enter the five-digit zip code where you’re planning to buy—whether it’s Detroit, Kalamazoo or Traverse City.
• Stay updated daily: Mortgage rates change often, sometimes more than once a day. Our rate chart is refreshed every weekday, so you can keep tabs on real-time shifts and avoid surprises.
• Explore refinance opportunities: Refinance rates can differ from purchase loan rates, so they may be worth comparing, depending on your needs. Visit our mortgage refinance rates page to explore options that may lower your monthly payments or shorten your loan term.
• Speak with a Home Lending Advisor: A Michigan-based Home Lending Advisor can help break down current rate trends, explain what impacts your rate and guide you toward loan options that fit your budget and goals.
• Get prequalified or preapproved: Starting the mortgage prequalificationec-mortgage-prequalificationec-mortgage-prequalification or preapproval process can give you insight into what rate range you may qualify for and can help you plan your home search 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:ec-fix-adj-arm-jan-25ec-fix-adj-arm-jan-25ec-fix-adj-arm-jan-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 Michigan

Mortgage rates in Michigan are shaped by a mix of personal financial factors and economic forces. Some influences are specific to you as the borrower, like your credit score or income, while others are driven by national trends or conditions in Michigan’s local housing markets. Understanding all sides can help you make more informed decisions when it’s time to buy or refinance.

What influences your mortgage rate in Michigan?

Your finances carry 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 Michigan, here are some key factors that could shape your interest rate:

• Credit track record: A strong credit score and history of on-time payments can unlock better rates. If your credit report shows late payments, high utilization or collections, that may be reflected in your rate offer.
• Consistency of earnings: Consistent earnings and steady employment suggest financial stability. Loan providers don’t care exclusively about how much you make, but also how you receive it. Lenders might ask for additional documentation if you have freelance work or a gap in your income, as opposed to having a regular salaried paycheck.
• Debt: Your debt-to-income (DTI) ratio helps mortgage lenders determine how much of your income goes toward paying off existing debt. A high DTI may reduce your borrowing power or result in a higher rate to compensate for added risk. A lower DTI may suggest more room in your budget to handle a mortgage and can lead to more competitive rates.
• Savings: 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.
• The size of your down payment: A larger down payment could not only lower your rate but also reduce or eliminate the need for private mortgage insurance (PMI).
• Other loan details: Loan providers also factor in the home’s purchase price, how you intend to use the property (primary residence vs. rental), the loan term (15 or 30 years) and the loan type. Each of these details will help determine the final rate you’re offered.

How the economy shapes mortgage rates in Michigan

Mortgage rates in Michigan are largely shaped by national economic trends. One major influence is the U.S. Federal Reserve (commonly referred to as “the Fed”). When the Fed changes the federal funds rate (the interest rate banks use when lending to each other), lenders often follow suit by adjusting mortgage rates. Inflation, employment levels and economic outlook also play a role. These big-picture shifts directly affect how much it costs to borrow in Michigan.

Mortgage rates by loan type

The type of home loan you choose in Michigan can directly impact your mortgage rate. Each loan type comes with different terms, benefits and potential trade-offs:

• Fixed-rate mortgages: Your interest rate and monthly payment stay the same for the entire term—typically 15, 20 or 30 years. This option offers predictability, which many Michigan homebuyers may value in a fluctuating market.
• Adjustable-rate mortgages (ARMs): ARMs often start with a lower interest rate for the first few years (like 5, 7 or 10 years), then adjust periodically throughout the life of the loan. These loans may appeal to homebuyers planning to move or refinance before the rate changes.
• Jumbo loans: If you’re purchasing a home that exceeds Michigan’s conforming loan limits, you’ll likely need a jumbo loan. These loans may carry stricter approval criteria and slightly higher interest rates due to their larger size and added risk.
• Federal Housing Administration (FHA) loans: Insured 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 have 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 Michigan.

How mortgage rates impact affordability in Michigan

Mortgage rates play a crucial role in determining what you can afford. Even small rate changes can shift your monthly payments and the total cost of your loan. The length of your loan (such as a 15-year versus a 30-year term) also affects your total interest paid.

You can use tools like a mortgage affordability calculator or speak with a Michigan-based lending advisor to understand how current rates align with your budget and homeownership goals.

Interest rate example

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)

Let’s say a home price is $257,300. 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 $1,230 with a total cost of $444,280 over the lifetime of the loan.
• With a 7% interest rate: Estimated monthly costs would be $1,370 with a total cost of about $493,000 over the lifetime of the loan.

In summary

Whether you’re looking to buy a home in Grand Rapids or refinance in Detroit, connecting with a Michigan-based Home Lending Advisor can help you make informed decisions. A local Home Lending Advisor can walk you through current rates, explain your loan options and tailor recommendations to fit your financial goals.

With a clear understanding of your options, you’ll be ready to move forward with confidence and take that next big step toward owning (or refinancing) a Michigan home.