Compare Current Mortgage Rates in Florida

Florida’s housing market has grown significantly, especially in Sarasota, Riviera Beach, and Winter Park. If you’re looking to buy a house in Florida, here’s what you need to know about Florida mortgage rates.

Mortgage rates in Florida are determined by a combination of the following factors:

• Federal Reserve: The Federal Reserve doesn’t set mortgage rates but sets short-term interest rates in response to what’s happening with the economy. Short-term interest rates have an indirect influence on long-term mortgage rates.
• Economic conditions: Economic conditions like inflation, unemployment, and economic growth can affect mortgage rates. For example, inflation causes central banks to raise interest rates, leading to higher mortgage rates. 
• Location: Many people don’t realize that mortgage rates vary from state to state. If a state is more expensive and highly populated, there will be more lenders competing, which drives down interest rates. However, if there are high operating costs in that state, this increases the lender’s overhead. These costs will usually be passed on to borrowers through higher interest rates. 
• MBS prices: Mortgage-backed securities (MBS) are indirectly related to interest rates. When there’s a strong demand for MBS, the price of bonds begins to increase. Bonds tend to have an inverse relationship with the 10-year Treasury yield, so as the cost of MBS increases, interest rates will usually decrease.

Yes, Florida Housing’s first-time homebuyer program offers 30-year fixed-rate mortgages through participating lenders in the state. To qualify, you must meet the following requirements:

• Minimum credit score of 640
• Work with an approved participating lender
• Complete an approved buyer education program
• The home’s purchase price is lower than the county limits
• Income is below the county limits
• Haven’t owned a primary residence in the last three years

Eligible borrowers can also apply for down payment and closing cost assistance through one of Florida Housing’s second mortgage programs. 

Everyone wants to find the lowest mortgage rate possible since even a marginal increase can cost you thousands of dollars over the life of the loan. Many different factors determine mortgage interest rates and some of these are within your control. 

Here are four tips for finding the best mortgage rates in Florida.

Improve your credit score

Your credit score is one of the biggest factors affecting your mortgage rates since it tells lenders how likely you are to repay the loan. The higher your credit score, the lower your interest rate will be. 

According to FICO, a borrower with a 760 or higher credit score would qualify for a 6.44% interest rate as of January 16. In comparison, a borrower with a credit score below 639 would receive an 8.05% interest rate and pay an additional $233 per month. 

Before you apply for a mortgage or begin looking at houses, request your credit report from the three major credit bureaus. You can contact your credit reporting company and flag errors or discrepancies on your report, which could help improve your score. If your score is still lower than you’d like, you can also work on boosting your credit utilization rate by paying your bills on time. 

Save for a down payment

Borrowers who make a 20% down payment will also receive lower interest rates since this reduces the risk to the lender. If you put down less than 20%, most lenders will require you to purchase private mortgage insurance (PMI), which will add to the overall cost of your mortgage.

A mortgage calculator can help you estimate your monthly payments based on your interest rate, loan terms, and down payment. This information can help you figure out how large your down payment should be. 

Know your loan terms

Another way to lower your interest rate is by choosing shorter loan terms. For example, data from Freddie Mac shows that as of January 12, the weekly average mortgage rates for a 30-year loan term are 6.66%. In comparison, 15-year mortgages have an average rate of 5.87%. 

Choosing shorter loan terms can lead to lower interest rates, but your monthly mortgage payments will be higher. Look at your budget to ensure you can afford the higher payments before applying for a 15-year mortgage.

Consider mortgage points

Lenders give borrowers the option to purchase mortgage points to lower their interest rates. Mortgage points are a one-time fee you pay at closing in exchange for lower rates. This will increase your upfront costs, but you’ll pay less over the life of the loan.

Each mortgage point typically costs 1% of your total loan amount in exchange for 0.25% off your interest rate. So if your loan is $400,000 and your current interest rate is 7%, you’ll pay $4,000 for an interest rate of 6.75%.

Your loan type will also influence the interest rate you receive. The following table outlines different mortgage types available to Florida borrowers and the eligibility requirements for each one.

Conventional loans

• Description: Conventional loans aren't backed by a government entity. These loans may cost less than other loan types but can be harder to qualify for.
• Qualification: Credit score of at least 620, DTI below 45%, minimum 3% down payment
• Best for: Borrowers with good credit and a higher down payment

FHA loans

• Description: The Federal Housing Administration backs FHA loans. These loans come with lower interest rates and flexible credit requirements.
• Qualification: Minimum credit score of 580 with a 3.5% down payment, minimum credit score of 500 with a 10% down payment, mortgage insurance is required
• Best for: Low-income borrowers with poor credit

VA loans

• Description: The Department of Veterans Affairs backs VA loans. These loans don't have any down payment requirements.
• Qualification: A Certificate of Eligibility to verify your service history and duty status
• Best for: Veterans, active duty service members, and eligible family members

USDA loans

• Description: The U.S. Department of Agriculture backs USDA loans. These loans are available for low- and moderate-income borrowers moving to eligible rural areas.
• Qualification: Income cannot exceed 115% of median household income, the home must be your primary residence, the home is located in an eligible rural area
• Best for: Low-income borrowers in rural areas