Today’s Montana Mortgage Rate

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ByChristopher Boston
Edited byJlyne Ubina
ByChristopher Boston
Edited byJlyne Ubina

Updated: October 29, 2023

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In Montana, more people own their homes compared with the U.S. average. Homeownership often involves a mortgage, which is a loan to buy property. If you’re wondering if there’s a trick to a smooth mortgage journey in the Treasure State, it’s paying attention to the mortgage rate. A good one can save you money in the long run and make your monthly payments more manageable. So, if you're considering buying a home, start by finding the best mortgage rates in Montana to ensure a better experience.

Current Mortgage Rates in Montana

According to FRED Economic Data, the national homeownership rate in 2022 is 65.9%, slightly below Montana's rate of 68.3%. It suggests that mortgages could be a key factor in the Treasure State’s higher homeownership rate.

Now, if you’re leaning toward this direction, it’s best to look into the rates. Nationally, a 30-year fixed-rate mortgage comes in at 7.02% compared with Montana's 6.84%. For a 15-year fixed rate, it's 6.31% in the U.S. and 6.15% in Montana. With five-year adjustable-rate mortgages, the national rate is 7.26%, while Montana offers 6.94%.

It's clear that some of the average mortgage rates in Montana are more favorable than the national averages. But it's important to remember that these can fluctuate due to various factors like market conditions and government policy. It's wise to stay updated on current rates, especially considering the different mortgage types available in Montana, each with its own. The rate table below can help you explore your options.

Finding the Best Mortgage Rates in Montana

Understanding the role of mortgage rates in your financial well-being is like knowing the rules of a game before you play — it equips you to win. Competitive mortgage rates can elevate your financial freedom in the long run. For instance, a lower rate can result in saving thousands of dollars over the life of the loan. It also allows you to build home equity more quickly.

To empower you in this journey, here are some effective strategies to secure the best mortgage rates in Montana:

  • Consider Loan Length: Shorter-term loans often come with lower interest rates. For example, a 15-year fixed-rate mortgage might offer a rate 0.5% lower than a 30-year mortgage. It can result in substantial savings over time, though it will increase your monthly payment.

  • Check for Rate-Lock Options: Some lenders offer the ability to lock in a rate for a limited period, protecting you against potential rate increases during your mortgage application process. For instance, if you lock in a 3% rate and the average mortgage rate climbs to 3.5% before you close, you've saved yourself from higher payments for the life of the loan.

  • Negotiate Rates: Believe it or not, mortgage rates aren't always set in stone. Lenders have some flexibility, especially if you're a highly qualified borrower. For instance, if one lender offers you a rate of 3.2%, you can use this as a bargaining chip to see if another lender might go down to 3% or lower. It could save you thousands over the life of your mortgage.

  • Increase Your Down Payment: A larger down payment not only decreases the amount you'll need to borrow but also secures you a lower mortgage rate because it reduces the lender's risk. Let's say you opt for a 20% down payment on a $300,000 house instead of the standard 10%. This could result in a rate decrease of up to 0.25%, which can save you thousands over the course of your mortgage.

  • Clean Up Your Finances: Before approaching lenders, make sure your finances are in optimal shape. Pay down high-interest debt, and don't open new credit lines, improving your debt-to-income ratio. For example, if you have $10,000 in credit card debt with a high interest rate, paying that down can noticeably improve mortgage rate offers.

These tactics can help you set yourself up for a strong financial future. And don't forget, the best mortgage rates in Montana are available to those who do their homework and play their cards right.

Mortgage Types in Montana

In Montana, the average home value is around $447,068, significantly higher than the national average of $348,126. This information is crucial for setting a budget and understanding what type of mortgage will fit your needs. Given Montana's higher home values, a mortgage becomes an invaluable tool to bridge the financial gap and make homeownership achievable.

Mortgage Type

Conventional: These are standard loans not backed by the government.

Lower fees and the option for a variety of term lengths can offer flexibility. Good for those with strong credit.

Requires a higher credit score and often a larger down payment.

Jumbo: These loans exceed conventional loan limits and are used for high-value properties.

Allows you to purchase homes above conventional loan limits. Ideal for high-income earners.

Comes with higher interest rates and requires a robust financial profile.

VA: Loans guaranteed by the U.S. Department of Veterans Affairs.

No down payment required and no private mortgage insurance (PMI) needed. Designed for veterans.

Eligibility is limited to veterans, and the home must be a primary residence.

FHA: Loans insured by the Federal Housing Administration, aimed at low-to-moderate-income borrowers.

Easier qualification criteria and lower down payment requirements can aid first-time homebuyers.

Expect higher ongoing fees and mandatory mortgage insurance.

USDA: Loans backed by the U.S. Department of Agriculture, aimed at rural homebuyers.

No down payment and generally lower interest rates make it appealing for low-income buyers in rural areas.

Geographic and income restrictions apply.

After familiarizing yourself with the various mortgage types, it's vital to understand rate structures as well. Why? Because the rate structure can significantly impact your monthly payments and overall loan cost. You can choose from:

  • Fixed-Rate Mortgages: Your interest rate remains constant, which makes budgeting straightforward and eliminates surprises. It’s ideal if you plan on staying in the home for a long time and want financial predictability. However, you might start with a higher interest rate compared with adjustable-rate mortgages.

  • Adjustable-Rate Mortgages: The interest rate can vary based on market conditions. It usually starts with a lower initial rate, making it attractive if you plan to sell or refinance before the rate adjusts. The risk lies in potential rate increases, which could elevate your monthly payments unexpectedly.

Knowing your options for mortgage types and rate structures sets you up to find the best match for your financial needs. Finding the right ones put you one step closer to owning the home that's perfect for you in the Treasure State.

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A mortgage calculator is your best friend when figuring out what you can afford. You can try different loan types, down payments and mortgage rates in Montana to see how each variable impacts your monthly payment and the total loan cost. Don't just guess what you can afford — use MoneyGeek’s mortgage calculator to get accurate numbers and find the right mortgage for you.

How to Get a Mortgage in Montana

Owning a home is a significant milestone, and it all starts with securing the right mortgage. Knowing the process positions you as an informed consumer, capable of making choices that can save you both time and money. Whether you're a first-time buyer or a seasoned investor, taking intentional steps to secure your mortgage can play a pivotal role in your financial well-being. Here’s a detailed step-by-step guide that walks you through how to get a mortgage in Montana.

Assess Your Budget

Begin by figuring out how much you can comfortably afford for mortgage payments. Knowing this will not only narrow down your home search but also set you up for financial success.

Secure Pre-Approval

Get a pre-approval letter from a lender to have an edge in the homebuying process. The lender will look at your credit history, income and other financial details to determine how much they'll lend.

House Hunting

With a pre-approval in hand, you can now actively look for homes that fit your budget. Collaborate with a real estate agent knowledgeable about the Montana market.

Choose a Mortgage Type

Different mortgages come with their own set of terms. Research your options, such as fixed-rate or adjustable-rate, to decide what best suits your needs.

Shop for Lenders

Multiple loan estimates will help you get the most favorable terms. Don't just go with the first mortgage lender you meet — take the time to compare offers.

Submit Your Application

After choosing a lender, you'll need to submit a detailed mortgage application, which will require financial documents like pay stubs and tax returns.

Home Appraisal

An appraisal will be necessary to verify that the property is worth the sale price. It’s an essential step for final loan approval.

Review Closing Disclosure and Close the Deal

Before closing, you'll receive a disclosure outlining your loan terms and closing costs. Review it carefully before signing the documents. You'll make any required upfront payments, and then you'll receive the keys to your new home.

Getting a mortgage in Montana requires a few key steps, from assessing your budget to closing the deal. Each one offers a chance to improve your financial standing and secure favorable mortgage rates. Take your time, and don't hesitate to seek professional advice when needed.

Mortgage Programs in Montana

Owning a home involves more than just mortgage payments — you also have to think about property taxes and maintenance costs. But don't let that discourage you — Montana Housing offers several mortgage programs to help make homeownership more affordable. These can offer financial assistance whether you're a first-time homebuyer or looking to refinance. This way, you not only get to invest in a property but also take advantage of programs that can ease your financial journey.

Regular Bond Program

The Regular Bond Program in Montana offers a 30-year loan with a low-interest rate, designed specifically for first-time homebuyers who meet income and purchase price criteria. It’s a solid option if you're just starting out and want to plant roots in the Treasure State. The program accepts different types of homes — be it a single-family home, a condo or even a manufactured home. You must first qualify for a basic mortgage loan like FHA, VA, RD or HUD-184.

Down Payment Assistance

Montana offers two types of down payment assistance to make homebuying more achievable: Bond Advantage and MBOH Plus 0% Deferred. Their similarities lie in their baseline for eligibility, such as qualifying for a Regular Bond Program Loan. They also mandate a minimum credit score of 620 and require homebuyer education to ensure you're well-equipped for this financial commitment. And don't forget, you'll need to invest at least $1,000 of your own or gifted money into your home purchase.

Here’s what sets them apart:

  • Bond Advantage Down Payment Assistance Program: This offers a dual advantage — helping with your down payment and closing costs. You can get assistance for up to 5% of the sales price, capping at $15,000. However, it isn't a giveaway — you'll be responsible for low monthly payments over a 15-year amortization period.

  • MBOH Plus 0% Deferred Down Payment Assistance Program: This program also offers up to 5% of the sales price for down payment and closing costs, with a max of $15,000. However, it's a 0% second loan with no monthly payments. You won't have to pay it back until you sell, transfer or refinance your property.

So, your decision hinges on your comfort with monthly payments and your long-term financial strategy. Either way, you're on a path toward securing the best mortgage rates in Montana.

80% Combined Program

This unique program combines an 80% Loan-To-Value (LTV) first mortgage with a second loan of 20% LTV. The benefit? You get to skip the need for mortgage insurance entirely.

The first-position loan is a standard 30-year loan, but it’s offered in collaboration with a nonprofit organization for the second loan. This dual arrangement enables you to finance 100% of the home price without needing private mortgage insurance, which can save you a significant amount over time. It’s a viable alternative to FHA loans and the insurance premiums that come with them. Keep your eyes peeled for current mortgage rates in Montana as you evaluate this program.

Montana Veteran’s Home Loan Program

The Montana Veteran’s Home Loan Program recognizes those in the military or the national guard by offering favorable loan terms that aren’t tied to income or purchase price limits. Administered by Montana Housing and funded by the Montana Coal Tax Trust Fund, this program's mortgage interest rate is 1% lower than the market average. That may not sound like much, but over time it can make a massive difference in what you pay back.

You'll need to consult with a participating lender to fully understand any additional limitations, but this program opens doors to veterans who are seeking to become homeowners. Keep an eye out for current mortgage interest rates in Montana, as this program might make your dream home more attainable.

Mortgage Credit Certificate

A Mortgage Credit Certificate (MCC) is like a gift that keeps giving. Unlike a traditional loan, it's a tax credit that directly reduces your federal income tax. For each tax year, you can claim a credit equal to 20% of your mortgage interest, up to $2,000. While this program doesn't directly tie into Montana Housing loans, it's a flexible benefit that you can apply to your preferred mortgage. Just keep in mind this isn't a loan — it's a credit against your taxes.

If you refinance down the line, Montana Housing might re-issue your MCC, but that's not guaranteed. The reissued MCC will apply to the balance remaining from your original loan. For many first-time homebuyers, it can be a game changer in terms of overall affordability. So, when you're looking at mortgage rates in Montana, factor in how an MCC could help you financially.

Frequently Asked Questions

You probably have questions about mortgage rates in Montana if you're exploring homeownership in the Treasure State. To help you, we answered some commonly asked questions to let you navigate the mortgage landscape more confidently.

What are the current mortgage rates in Montana?
How do mortgage rates differ between Montana's larger cities and its rural areas?
Are there any state-sponsored mortgage rate programs specific to Montana?
Can a larger down payment lead to lower mortgage rates in Montana?
How do seasonal factors, like tourism or weather, impact mortgage rates in Montana?
Are there any local credit unions in Montana offering competitive mortgage rates?
What role does your credit score play in determining your mortgage rate in Montana?
How do mortgage rates for investment properties compare with primary residences in Montana?

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.