Compare Current Mortgage Rates in Alaska

Your mortgage interest rate affects how much you'll pay each month for your mortgage loan. The higher your interest rate, the more your mortgage payment will be. The lower your interest rate, the less your payment will be.

For example, on a 30-year fixed-rate $275,000 loan with an interest rate of 6.5%, you’d pay about $1,738 each month. With an interest rate of 8.5%, you’d pay about $2,115 each month. In this case, those 2 percentage points equal $377 a month.

Lenders in Alaska reference several sources when setting interest rates for customers:

• The Federal Reserve: The Federal Reserve sets the federal funds rate. This is the rate lenders charge each other. If the federal funds rate is high, mortgage rates will probably reflect that. If the federal funds rate is low, mortgage rates should be lower.
• Economic conditions: In a robust economy, people are more likely to have the funds to buy a house. This tends to lead to more demand for home loans. Increased demand usually correlates to higher interest rates. 
• Inflation: Inflation occurs when there is more money in circulation than there are products to buy. With inflation, consumers need to spend more to buy goods and services. 

Yes. Alaska has several first-time homebuyer programs.

The Alaska Housing Finance Corporation, also called Alaska Housing, offers two programs for first-time homebuyers. If you haven't owned a home in the last three years, you're considered a first-time homebuyer.

First Home Limited

Loans under this program offer lower interest rates to borrowers who don't exceed maximum income and acquisition cost limits. The federal government determines the limits. You can find income limits here and acquisition limits here. 

If you buy in a location that the Department of Housing and Urban Development (HUD) has designated as a target area, income and acquisition cost limits are higher. Targeted area income limits are found here. You can determine whether a house is in a targeted area by searching here. 

You don’t have to be a first-time buyer to qualify for this program if you're a qualified veteran. However, having a dishonorable discharge or not completing your military obligation disqualifies you from getting a veterans loan. 

You can buy a single-family home, condominium, common interest community unit, duplex, or Type 1 manufactured home. If you buy a duplex, it must be five years old and have been used as a multifamily property for the last five years. You will need to provide a copy of your tax returns and read a provided tax-exempt booklet to qualify.

First Home

Loans under this program offer a reduced interest rate for qualifying borrowers who exceed the maximum income and acquisition cost limits. You can buy a single-family home, condominium, common interest community unit, duplex, or Type 1 manufactured home. If you buy a duplex, you must live in one of the units.

Loans available under both First Home and First Home Limited include the following options:

• Affordable housing enhanced loan
• Energy efficiency interest rate reduction
• Interest rate reduction for low-income borrowers 
• State veterans preference

Alaska Housing also offers closing cost and down payment assistance programs. Depending on your credit profile, 3% or 4% of your loan amount can be used toward closing costs or the down payment. This assistance is available through approved lenders. You could also get down payment assistance from nonprofit organizations if you qualify and funds are available.

There are also national first-time homebuyer programs:

• Habitat for Humanity: This program helps build houses for families in need around the world. Homebuyers, along with volunteers, help build their own homes. The other goal of this program is to help buyers keep their mortgage costs below 30% of their gross monthly incomes.
• Freddie Mac Home Possible mortgage: This mortgage is for low-income borrowers. It allows for flexibility in terms of funding sources, and down payment requirements start at 3%. For example, co-borrowers don’t need to live with you if you’re buying a one-unit residence.
• Homeowner vouchers: This is for low-income buyers already in the Housing Choice Voucher (HCV) program. You could use your voucher to buy a home, and then receive monthly assistance for home expenses.
• Government-backed home loans: You can get help buying a home through the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA). (More on these loan types in the table below.)

You can’t control all the factors lenders use to determine the interest rate on a loan, such as the Federal Reserve, economic conditions, and inflation. But there are several factors you can control to get a better rate:

• Improve your credit score: Your credit score plays a large role in the interest rate you’ll get. The higher your score, the lower your interest rate should be. FICO credit scores of 800 to 850 are exceptional, 740 to 799 are very good, 670 to 739 are good, 580 to 669 are fair, and 579 and below are poor. You can get a copy of your credit report by visiting AnnualCreditReport.com. That will help you determine what you might need to do to improve your credit score so that it’s as high as possible before you apply for a mortgage.
• Down payment: A larger down payment usually means you get a lower interest rate. The more money you have invested in the home, the less risky you appear to lenders. You often need to put down at least 20% to get the lower rate.
• Compare lenders: It’s a good idea to contact several lenders and ask for a loan estimate. You’ll be asked to give some basic information including your name, income, Social Security number, address of the home you’re interested in buying, the home’s price, and how much you want to borrow. Your credit score might go down a few points from the initial inquiry, but as long as you get all your loan estimates within 45 days, your credit score will not be affected again.
• Get a pre-approval letter: Once you’ve picked a lender and are ready to buy within 30 to 60 days, you can apply for a pre-approval letter. Your lender will tell you which documents it will need. Then, you or your real estate agent can show this letter to home sellers to show you’re a serious homebuyer. The pre-approval letter is not the loan. You’ll still need to apply for that once you’re under contract.

Alaska residents have a variety of mortgage types available to them:

Conventional

• Description: Any mortgage loan that is not insured by the government. The loan amount must be less than $766,550 (as high as $1,149,825 in Alaska and other high-cost areas).
• Qualifications: Minimum down payment of 3%, minimum credit score of 620, DTI below 43%.

Jumbo

• Description: Loan amount higher than $1,149,825 in Alaska. Available only in certain counties.
• Qualifications: Credit score of 700 and up, DTI below 43%, 20% or more down payment often required.

FHA

• Description: Backed by the Federal Housing Administration. Requires mortgage insurance on loans. FHA-approved lenders make the loans.
• Qualifications: Down payment of 3.5%, DTI of less than 45%, typically a FICO score of 580 or more to qualify for 3.5% down.

VA

• Description: Home loan program for service members, veterans, and family members. No down payment is required.
• Qualifications: You need a Certificate of Eligibility (COE) from the VA.

USDA

• Description: Helps people buy a home in rural areas. No down payment is required.
• Qualifications: Income must not exceed 115% of median income, must live in the residence, home must be in an eligible rural area.