Compare Current Mortgage Rates in Illinois

If you’re looking for a mortgage in Illinois, you might be wondering what interest rate you can get. There are economic and market conditions beyond your control, but there are other personal factors that can determine what interest rate you’ll get.

Knowing what you can control and how rates work can help you get the best mortgage interest rate in Illinois. 

If you’re buying a house in Illinois, there are economic and market forces that will influence your interest rate. The factors that can affect mortgage rates include:

• State law: Certain laws and regulations can make it more expensive to lend in one state over another. The Consumer Financial Protection Bureau lets you see each state’s interest rate, which tends to vary slightly. 
• Federal funds rate: The Federal Reserve sets the federal funds rate, which is what banks pay to borrow money. The more the banks have to pay, the more your mortgage will cost. 
• Market conditions: Market conditions refer to the demand for mortgages. If there’s a high demand, the lender can price the mortgage higher, which can increase your interest rate. 
• Lenders in your state: Competition between lenders can lead to lower interest rates when more lenders want your business. It can also mean rates tend to be higher in areas where there are fewer lenders to choose from.
• Mortgage term: The term you choose — whether you get a 15-year mortgage, a 30-year mortgage, a seven-year adjustable-rate mortgage (ARM), or an interest-only loan — will affect your rate. 
• Type of mortgage: There’s some variance among interest rates when you finance with a different type of mortgage. The annual percentage rate (APR) on a VA loan vs. an FHA loan, for example, will not be the same. Likewise, the interest rate on a fixed-rate mortgage is going to be different when compared to an adjustable-rate mortgage interest rate. 
• Credit score: A higher credit score translates into a lower interest rate. If you can demonstrate to lenders that you are financially responsible, you could save thousands over the life of your loan
• Home price: Homebuyers can expect to pay higher interest rates on mortgages that are higher or lower than normal. The bigger the loan, the greater the risk to the lender. On the other hand, significantly smaller loans are less profitable, so the lender might offset this with a higher interest rate.
• Down payment: A higher down payment can decrease the APR. This is because lenders see you as less risky when you have a bigger stake in your property from the outset. 
• Points: You can elect to pay down your interest rate with mortgage points. This essentially means you pay money upfront for a lower interest rate. 

Illinois has first-time homebuyer programs that can provide you with down payment assistance. There are a handful of state programs as well as city-specific down payment assistance programs: 

IHDA Access Repayable Mortgage 

This is an interest-free loan from the Illinois Housing Development Authority (IHDA) up to $10,000 for the down payment and closing costs assistance. It’s available for both repeat and first-time homebuyers and is repayable monthly over a 10-year period. You must have a credit score of 640 or higher and meet income and purchase limits. 

IHDA Access Deferred Mortgage 

This is a type of loan where you can qualify for up to 5% of the purchase price (up to $7,500) for down payment and closing cost assistance. The loan doesn’t need to be repaid until you refinance, sell your home, or pay off your mortgage. It’s available to repeat and first-time homebuyers, but you need a 640 credit score to qualify. 

IHDA Access Forgivable Mortgage 

The Access Forgivable loan offers 4% of the purchase price up to $6,000 to help cover closing costs or the down payment. The loan is forgiven over 10 years. Borrowers need a 640 minimum credit score to qualify. Income and purchase limits apply.

Neighborhood Lending Services

Borrowers may qualify for up to $30,000 in down payment assistance if they are buying in Chicago. Households can make up to 120% of the area median income to qualify for this loan. 

If you want to get the best mortgage rate in Illinois, the best thing you can do is improve your qualifications. To help improve your borrower profile, you can:

• Shop around: Don’t underestimate the power of shopping around for a mortgage. When you obtain multiple loan estimates for the mortgage you want, you may be surprised at the different rates and fees lenders can charge. 
• Improve your credit score: You may get better interest rates when your credit score improves. Credit scores above 780 may qualify for the best interest rates. 
• Pay down debt: Paying down debt has the benefit of decreasing your debt-to-income ratio (DTI), which can improve the terms a lender is willing to offer you. 
• Save for a bigger down payment: A bigger down payment makes you less risky from the lender’s perspective. Lenders usually offer better terms for borrowers with a larger down payment, and you’ll avoid paying for the private mortgage insurance (PMI) that usually comes with a down payment below 20%. 
• Consider a shorter loan term: If you can handle a shorter loan term and a higher monthly payment, you’ll usually get a lower interest rate. You’ll also pay much less interest over the life of the loan because you’re repaying it in a shorter period of time.
• Consider a different loan type: Different loan types come with different APRs. If you’re choosing between an FHA loan and a conventional loan, you might avoid the expensive upfront mortgage insurance premium required by the FHA and reduce your APR by going with a conventional loan. 

The major types of loans for borrowers in Illinois are listed below. It’s helpful to consult with a lender to determine which loan types could work best for your situation: 

Conventional

• Best for: Borrowers with good credit scores and at least 3% down payment
• Max. loan amount for a single-family home: $766,550 in most areas, $1,149,825 in high-cost areas
• Down payment: At least 3%
• Minimum credit score: 620

FHA

• Best for: Borrowers with low credit scores
• Max. loan amount for a single-family home: $498,257 in most areas, $1,149,825 in high-cost areas
• Down payment: At least 3.5%
• Minimum credit score: 500

USDA

• Best for: Borrowers in rural areas, no down payment
• Max. loan amount for a single-family home: $766,550 in most areas, $1,149,825 in high-cost areas
• Down payment: 0%
• Minimum credit score: Typically 640

VA

• Best for: Veterans, service members, and surviving spouses
• Max. loan amount for a single-family home: $766,550 in most areas, $1,149,825 in high-cost areas
• Down payment: 0%
• Minimum credit score: None

Jumbo

• Best for: Higher loan limits
• Max. loan amount for single-family home: Depends on the lender
• Down payment: 10%
• Minimum credit score: Usually over 700