Today’s Minnesota Mortgage Rate

Banner image
ByChristopher Boston
Edited byBenjamar Gabawa
ByChristopher Boston
Edited byBenjamar Gabawa

Updated: October 29, 2023

Advertising & Editorial Disclosure

In Minnesota, the Land of 10,000 Lakes, owning a home is a popular choice. Its homeowners rate, about 9% higher than the national average, proves that. One factor that may contribute to this figure is mortgages. These home loans make homeownership accessible to many Minnesotans. When you're hunting for a home and plan to get a mortgage to help you on your homebuying journey, you'll want to keep an eye on mortgage rates. Competitive mortgage rates in Minnesota can make your home loan experience smoother and potentially save you money over time.

Current Mortgage Rates in Minnesota

As of 2022, the national homeownership rate stands at 65.9%, according to FRED Economic Data. In contrast, Minnesota has a rate of 75.1%. The state’s figure suggests that mortgages may be a valuable tool for residents aiming for homeownership.

Current mortgage rates in Minnesota closely mirror the national averages. Comparing them, we found that the 30-year fixed-rate mortgage averages 6.97% both in Minnesota and in the country. The 15-year fixed-rate mortgage is 6.35% across the U.S. but is slightly higher in Minnesota at 6.40%. The 5-year adjustable rate averages at 7.32% in the U.S., with Minnesota clocking in at 7.34%.

However, remember that these rates can fluctuate any time due to several factors like economic conditions and Federal Reserve policies. It's also crucial to note that the mortgage type you select — conventional or government-backed — can influence your rate.

Finding the Best Mortgage Rates in Minnesota

Your mortgage rate affects your long-term financial health. Locking in a competitive figure can save you thousands of dollars throughout your loan. But how do you find the best mortgage rates in Minnesota when the market is continually shifting?

Here are some tailored tips to help you get the most out of your mortgage.

  • Consider rate locking: Mortgage rates fluctuate. By locking in a rate when it's low, you're safeguarding yourself from potential increases. Most rate locks last 30 to 60 days, giving you peace of mind while completing your mortgage process.

  • Collaborate with a co-borrower: Adding a financially stable co-borrower to your application can enhance your creditworthiness in the eyes of lenders. This strategy is more than just pooling resources — it can open the door to lower interest rates and better loan terms.

  • Consider a mortgage broker: These professionals can explore multiple lenders to identify the best rates and terms for you. Mortgage brokers often have exclusive access to special rates or terms that you might not find on your own.

  • Inquire about discount points: You can purchase mortgage points upfront to lower your interest rate. While this requires an immediate investment, it can help you save money all throughout your loan term, especially if you plan to stay in the home for several years.

  • Monitor economic indicators: Rates don't exist in a vacuum — they're influenced by the broader economy. By keeping an eye on metrics like inflation, employment figures and Federal Reserve actions, you can better anticipate future mortgage rate trends.

The current mortgage rates in Minnesota can shift based on various factors. Use these exclusive tips to better your odds of snagging a low mortgage rate that benefits you in the long run.

Mortgage Types in Minnesota

The average home value in Minnesota stands at $331,869, a bit lower than the national average of $348,126. Although homes are generally more affordable here, a mortgage can still be an essential stepping stone to homeownership.

Mortgage Types
Typical Requirements

Backed by private lenders, this type offers generally lower interest rates but requires strong credit.

  • Minimum 620 credit score
  • Ideally, a 20% down payment
  • Stable income and employment history

Backed by the government, allowing for lower credit scores and down payments.

  • Minimum 580 credit score
  • 3.5% down payment
  • Mortgage insurance required

Exclusively for veterans and active military, offering the perk of no down payment.

For high-value loans exceeding federal limits, offering larger loan amounts.

  • Minimum 700 credit score
  • 20-30% down payment
  • Lower debt-to-income ratio

Mortgage types aren’t the only things you must understand — there’s also the kind of mortgage rates you might face. The type of mortgage you'll choose influences the interest rate you'll get. Here are the two main types of rates you'll most probably come across with.

  • Fixed-Rate Mortgages: These mortgage rates set your interest rate and monthly payments in stone, offering you predictability and stability. They're a solid choice if you plan on staying in the home long-term because you don't have to worry about your rate suddenly skyrocketing. However, this comfort comes at a cost: fixed-rate mortgages often start with higher interest rates compared to their adjustable-rate counterparts.

  • Adjustable-Rate Mortgages (ARMs): These mortgages come with an interest rate that can change based on market conditions. You'll benefit from lower initial rates, which can make it easier to qualify for the loan. But there's a trade-off: your rates — and your monthly payments — can increase in the future. These are suitable if you plan on selling or refinancing your home before the adjustable period kicks in, minimizing the risk of rate hikes.

Now you're better positioned to choose a mortgage type and rate that aligns with your unique needs. When aiming for the best mortgage rates in Minnesota, understanding these nuances gives you a competitive edge, potentially saving you a significant amount of money over the life of your loan.

mglogo icon

A mortgage calculator can be your roadmap to homeownership. By inputting different variables like loan amount, down payment and interest rate, you can see how these factors affect your monthly payments. It takes the guesswork out of figuring out how much house you can afford. Plus, playing around with different possibilities can help you determine the best mortgage rates in Minnesota for your needs. So go ahead and give MoneyGeek’s mortgage calculator a try. It's a simple yet powerful tool to make your journey to owning a home in Minnesota a little smoother.

How to Get a Mortgage in Minnesota

Whether you're a first-time homebuyer or looking to refinance, understanding the specifics of the Minnesota mortgage market can put you in a stronger negotiating position and potentially save you money over the duration of your loan. We’ve broken down the step-by-step process, making owning a home less daunting and more actionable.

Review Your Financial Profile

Before even meeting a lender, check your financial standing. Knowing your credit score and debt-to-income ratio can set the stage for what to expect in loan offers.

Get Pre-Approved

A pre-approval letter from a lender doesn't just give you credibility — it's your first concrete look at what you can afford. Work directly with a lender known for competitive mortgage rates in Minnesota for a more accurate figure.

Budget Wisely

A pre-approval shouldn't be your spending limit; consider other expenses like insurance and utilities. Budget for a home that allows room for your entire financial picture, not just the mortgage payments.

Have the Necessary Documents

Gather your financial documents like W-2 forms, bank statements and tax returns early on to speed up the application process.

Choose the Right Lender

Different lenders offer different rates and terms. Selecting a mortgage lender who aligns with your financial needs can save you thousands of dollars over the life of the loan.

Choose the Right Mortgage Type

Opt for a mortgage type that complements your financial stability. Whether it's a fixed-rate or an adjustable one, each comes with its unique benefits and risks.

Submit Your Loan Application

Once you've gathered all the necessary documents and chosen a lender and loan type, it's time to apply. The faster you do this, the quicker you’ll get to the closing table.

Home Inspection

A home inspection could be your ace in the hole when negotiating the final price, and it can protect you from unexpected costs after the purchase.

Closing Time

Closing costs range from 2% to 5% of the home's value. Knowing this beforehand can help you negotiate or roll them into your loan amount, depending on your agreement.

Understanding mortgage rates in Minnesota and these steps can lead you to a more efficient and cost-effective home-buying experience.

Mortgage Programs in Minnesota

Homeownership isn't just about your mortgage payments — you also need to think about property taxes and maintenance costs. But don't worry, the state offers programs to ease these financial burdens. For example, Minnesota Housing offers several mortgage programs that can help you secure current mortgage rates in Minnesota that are both appealing and financially sustainable.

Start Up

This program is designed for first-time homebuyers, defined as anyone who hasn't owned a home in the last three years.

The perks? Income limits can reach up to $142,800 depending on your county, and the house price caps are as high as $515,200 in certain metro areas. If you need help with upfront costs, you could get a loan for down payments and closing costs of up to $18,000. However, you'll need to complete an approved homebuyer education course before sealing the deal. It’s a fantastic way to secure attractive current mortgage rates in Minnesota, especially if you're new to homeownership.

Step Up

Step Up is your go-to option if you exceed the Start Up program's limits or are already a homeowner. It raises the income limit to $185,700 and house price caps to $515,200 in the Metro area. You can also get up to $18,000 in downpayment and closing cost loans.

A minimum credit score is essential, and at least one borrower must complete an approved homebuyer education course if all are first-timers. The program even allows for mortgage refinancing.

Step Up's flexibility makes it shine, ideal for those who outgrow Start Up's limits. Plus, it offers a variety of mortgage rates in Minnesota, tailoring your loan to your financial landscape.

Downpayment and Closing Cost Loans

When you qualify for Start Up or Step Up, Minnesota Housing offers additional downpayment and closing cost loans. These aren't grants — they're actual loans that must be repaid in full. There are three options to consider:

  • Monthly Payment Loan: Available with either Start Up or Step Up programs, this loan offers up to $18,000. The interest rate mirrors your first mortgage rate, and you have a 10-year term to repay it.

  • Deferred Payment Loan: Exclusive to Start Up, this option provides up to $16,500 without interest. The loan doesn't require monthly payments. Instead, a balloon payment is due in full at the end of the mortgage term.

  • Deferred Payment Plus: Also specific to Start Up, this loan offers up to $18,000. Like the Deferred Payment Loan, it comes with no interest and requires a balloon payment at the end of the mortgage term.

These choices offer flexibility and financial leverage. By understanding what each entails, you can optimize your mortgage rates in Minnesota today and make a decision that complements your financial landscape.

Frequently Asked Questions

Whether you're a first-time homebuyer or a seasoned homeowner, the answers to these commonly asked questions can offer deeper insights into Minnesota’s mortgage rates.

What are the current mortgage rates in Minnesota?
How do Minnesota's mortgage rates compare with neighboring states like Wisconsin and Iowa?
Are there any Minnesota programs offering better mortgage rates for low-income families?
How can Minnesota residents use home equity to negotiate better mortgage rates?
How does your credit history affect your mortgage rate in Minnesota?
Do local Minnesota banks offer competitive mortgage rates?
What effect do seasonal factors have on Minnesota's mortgage rates?
Can previous homeownership in Minnesota affect your current mortgage rate?

About Christopher Boston

Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.