Mortgage rates in North Carolina

Quick insights

• Mortgage interest rates are updated regularly; for the latest rates where you’re looking to buy a home, search current mortgage rates in your target zip code.
• Many things influence North Carolina mortgage rates, including decisions made by the federal government, the type of mortgage and broader real estate market conditions.
• The interest rate on your mortgage can affect the overall affordability of your home, both monthly and over the lifetime of your loan.

If you want to buy a home in North Carolina soon, current mortgage rates may be top of mind. The interest rates on a mortgage can make a significant difference in terms of your monthly costs, as well as the amount you pay over the lifetime of your loan. And yet, mortgage rates are always changing, influenced by various market and personal factors. In this article, we’ll explain personal and macro factors affecting mortgage rates in North Carolina. We’ll also link to resources which provide the latest rates.

How to find mortgage rates in North Carolina

Average mortgage rates in North Carolina tend to vary by location. To get the most up-to-date information for a specific area, enter its zip code to find current mortgage rates. We update our interest rate table every day, Monday through Friday. Our mortgage calculator can also give you a personalized estimate as to your total monthly costs. Keep in mind, mortgage refinancing ratesec-30-year-fixed-rate-ma tend to be different from mortgage rates.

Getting preapproved for a mortgage can help you learn about mortgage terms based on your specific situation, including the interest rate you’re offered. For personalized assistance, consider reaching out to Home Lending Advisor in North Carolina.

U.S. mortgage rate trends

Current 30-year mortgage rates have been between 5% and 10%, but here are several annual averages for 30-year fixed-rate mortgage rates since 1971:refinance-hl000061

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

What factors affect interest rates in North Carolina?

There are both personal and broader factors which influence the mortgage rates you’re presented with. While decisions made by the government can impact rates generally, your financial profile also affects the rates you qualify for.

Consumer impacts

When applying for a mortgage, lenders will request a few different pieces of personal information relating to your finances. These details help the lender assess your likelihood of making payments on the loan, which can lessen their perceived risk and lower your rate:

• Credit score: Your credit history and associated credit score indicate your previous behavior as a borrower. With a solid credit score and history, the lender may deem you more “creditworthy” and could present lower interest rates as a result.
• Debt-to-income (DTI) ratio: Your DTI ratio reflects how much of your income is currently going toward existing debts. A high DTI ratio could disqualify you from a loan or increase the rates you qualify for to offset the lender’s risk.
• Down payment: Making a bigger down payment on your home purchase lessens the overall loan amount, which may decrease your interest rates. Similarly, with a small down payment, a lender may raise their interest rates.
• Income: Earning a substantial income could make you more attractive as a borrower, but that’s not always the case. Lenders may also consider the source and consistency of your income to assess your likelihood of making monthly payments.

Market conditions

You may have heard “rates are good right now,” or “rates are high,” regarding timing a home purchase with favorable interest rates. The U.S. Federal Reserve (usually called “the Fed”) can affect the mortgage rate market by adjusting the federal funds rate. Lowering the federal funds rate decreases borrowing costs for banks, which can lead to better interest rates for consumers. Listening to news about the Fed’s recent decisions can help you understand the current environment.

Interest rates and loan type

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

• Fixed-rate loans: A fixed-rate mortgage has the same interest rate throughout its lifetime. Having a fixed rate results in predictable, unchanging monthly payments.
• Adjustable-rate mortgages (ARMs): ARMs are generally structured with a fixed introductory rate period, followed by a variable rate structure. During the variable period, the interest rate is updated based on market movements, and payment sizes may vary.
• Federal Housing Administration (FHA) loans: FHA loans are insured by the federal government and intended to help those who might otherwise struggle to qualify for a mortgage get an affordable loan. As a result, FHA loans may have lower interest rates compared to conventional loans.
• Veteran’s Affairs (VA) loans: VA loans are intended to make buying a home more affordable for active duty servicemembers and veterans. These loans often have lower interest rates compared to conventional loans.
• Jumbo loans: Jumbo loans are loans that are larger in size than the standard “conforming” loan. Because of their size, they often have higher interest rates.

How rates affect affordability in North Carolina

When it comes to assessing the affordability for a certain loan, its interest rate is often a significant factor. This is because your loan’s interest rate can affect both short-term and long-term costs. For example, a $330,000 loan with a 20% down payment and 30-year term could be more or less affordable, depending on its interest rate:

• With a 6% fixed interest rate: Estimated monthly costs would be $1,580, with a total cost of $569,810 over the lifetime of the loan.
• With an 8% fixed interest rate: Estimated monthly costs would be $1,940, with a total cost of $697,370 over the lifetime of the loan.

These scenarios highlight the relationship between interest rate and affordability. It may be helpful to input your own numbers into a mortgage affordability calculator to create examples that are relevant to your real-life budget and costs.

In summary

The average mortgage rates in North Carolina are updated on a regular basis. Current mortgage rates for your target area can be found by searching by zip code. If you would like to explore your mortgage options one-on-one, consider reaching out to a local Home Lending Advisor who can assist you.