Today’s Tennessee Mortgage Rate

Tennessee has a higher homeownership rate than the national average. Many factors come into play when choosing a mortgage, but the mortgage rate is one of the most significant. Better mortgage rates in Tennessee can make your borrowing journey smoother and less costly. To make an informed choice, always compare rates and lenders before sealing the deal.

FRED Economic Data put the national homeownership rate in 2022 at 65.9%, while the homeownership rate in Tennessee sat slightly higher at 67.3%. Even though these numbers have dipped since 2020, it's likely that mortgages are playing a role in keeping Tennessee's homeownership numbers up. If you’re leaning towards getting one, exploring current mortgage rates in Tennessee is the next logical step.

Comparing average state rates to the national average reveals interesting trends. For example, the average 30-year fixed mortgage rate is 6.89% in Tennessee, slightly lower than the U.S. average of 7.06%. However, the 15-year fixed mortgage rate sits at 6.37%, almost the same as the national average of 6.35%. For a 5-year ARM, Tennessee’s rate averages 7.07%, below the overall U.S. figure of 7.30%.

Keep in mind that mortgage rates can change due to various factors, such as economic conditions, housing demand and lender competition, so it's wise to stay updated. You should also consider the mortgage types available in Tennessee, as different types come with varying rates. Check out the rate table below to help you make an informed decision.

Mortgage rates are pivotal in determining how much you'll end up paying for your home over time. Competitive rates can translate to thousands of dollars saved over the loan’s life. For example, a half-point drop in your rate could save you a substantial amount over 30 years. With that in mind, here are several tips to help you find the best mortgage rates in Tennessee.

• Find a Co-Borrower: Adding a co-borrower with a strong financial profile can make your mortgage application more appealing to lenders. That typically results in a lower interest rate. It’s especially useful if your own financial situation has room for improvement. Both incomes will be considered, making qualifying for a better rate easier.

• Negotiate Mortgage Rates: Believe it or not, mortgage rates are sometimes negotiable. Presenting offers from multiple lenders to the one you prefer could give you leverage to negotiate a lower rate. A minor rate reduction can add up to major savings over the life of the loan.

• Use a Rate Lock: A rate lock allows you to freeze the current mortgage rate for a specific period, usually 30 to 60 days. It can be particularly beneficial if you expect rates to rise before you close the loan.

• Larger Down Payments: The more you can put down upfront, the less risk the lender takes on, whichh often translates to a lower mortgage rate. While 20% is the standard down payment, going beyond this can tilt the odds in your favor for a lower figure.

• Keep an Eye on Market Trends: Mortgage rates can fluctuate based on economic indicators, like the federal funds rate or Treasury bond yields. By understanding these trends, you can time your mortgage application when rates are likely to be lower.

With these techniques, you'll have a greater chance of securing a mortgage rate that suits your financial situation. Each provides a unique angle for shaving points off your rate, making your path to homeownership in Tennessee more affordable.

Location often affects property prices. The average home value in the U.S. is around $349,770; in Tennessee, it's slightly more budget-friendly at $311,678. The lower average home value can be an advantage for borrowers because you can potentially get a larger or nicer home for your money. Despite Tennessee's more affordable housing scene, mortgages are a valuable tool for making homeownership accessible.

Fortunately, you're not limited to one or two options here — Tennessee offers a range of mortgages to suit different needs and situations. The comparison table can help you determine which fits you best.

Now that we've covered various mortgage types you can tap into let's shift our focus to rate structures. Understanding how different rate structures work adds another layer of savvy to your homebuying process.

• Fixed-Rate Mortgages: Your interest rate stays the same throughout the loan term. They offer predictable payments but if interest rates drop, you're stuck with your higher rate unless you refinance. Ideal if you plan on staying in the home for an extended period.

• Adjustable-Rate Mortgages (ARMs): Your rate can change after a set period, although it usually starts lower than fixed rates. The upside is you’ll have lower payments in the early years. The downside is that your rate (and payments) can increase, depending on market conditions. This structure is a better option for those who plan to sell or refinance before the rate adjusts.

Whether you're considering a fixed or adjustable rate, being informed helps you navigate the landscape of mortgage rates in Tennessee more confidently.

Understanding the end-to-end process of securing a mortgage in Tennessee can help you navigate your homebuying journey confidently. Knowing each step can give you an upper hand, making it easier to land a deal that fits your financial situation.

This roadmap to getting your mortgage in Tennessee will help you find a loan that aligns with your financial goals. A little knowledge goes a long way, especially when it comes to making one of the biggest purchases of your life.

Owning a home isn't just about covering the mortgage — you'll also have to think about property taxes and maintenance costs. These hidden expenses can add up quickly. Fortunately, some mortgage programs can help you offset these costs, suuch as those from the Tennessee Housing Development Agency. These programs can help you secure lower mortgage rates in Tennessee, leaving you more money for those future expenses.

If you're looking to buy your first home in Tennessee, the Great Choice Home Loan program might be your ticket. It’s specifically for Tennesseans with middle or moderate income. You get a loan with a 30-year term, which makes your monthly payments more manageable. Plus, the interest rate won't change during the loan, so you won’t experience payment shock.

You'll need a minimum credit score of 640 to qualify, but if you fall short, there's help available to improve it. The program also comes with down payment assistance, and you can even use it for off-site manufactured homes. If you're worried about the upfront costs, this program's got you covered.

If you're a hero in your community — think military, law enforcement, EMT or firefighter — Tennessee has a special mortgage program that you may be able to take advantage of. Homeownership for Heroes is designed to make your homebuying journey a bit easier. This program lowers your interest rate by 0.5% and lets you skip the first-time homeowner requirement. You can borrow up to 100% of the home's price with certain loans. And just like the Great Choice program, it offers down payment assistance and requires a minimum 640 credit score. It's a solid deal for those who serve.

The THDA’s mortgage programs aren’t just for first-time homebuyers. Those who have owned homes before can apply for its Repeat Homebuyer Loan program. You're eligible if you haven't owned a home in three years, are buying in specific counties or if you're in the military. Like the first-time buyer program, this one has perks like a 30-year term, fixed interest rates and down payment help. You'll need a 640 credit score to get started. It can cover up to 96.5% of your home’s total cost, meaning you'd only need a 3.5% down payment.

If you've secured a Great Choice Home Loan, you've got options for extra help on your down payment or closing costs. Check out the Down Payment Assistance program, which offers two choices.

One is a deferred $6,000 loan with zero interest, and you don't pay it back until your 30-year term is up or you sell the house. The other option is a loan for 6% of your home's sales price, which you pay back monthly over 30 years. Just complete a quick homebuyer education course to qualify. Either way, it's a nice boost to make homebuying more manageable.

You may have questions about Tennessee’s mortgage rates when you’re about to make a significant financial decision. Our responses to these commonly asked questions can provide you with more information.