Compare Current Mortgage Rates in New Jersey

When you buy property, you'll generally need to get a loan from a home lender like a credit union or a bank. This loan will come with a mortgage interest rate, which is the cost of borrowing money. 

Mortgage rates in New Jersey vary based on factors like your creditworthiness, down payment amount, the loan type and term, and current economic factors. The higher your interest rate is, the larger your monthly mortgage payment will be and the more you’ll pay in overall interest charges.

If you’re thinking about purchasing a home in New Jersey, here’s what you need to know about current mortgage rates, how they’re determined, and the types of homebuying programs available.
 

New Jersey mortgage rates are determined by factors that are within and beyond your control. When setting their rates, lenders will often consider the following indirect (or external) factors:

• Current market conditions: The current housing market plays a role in mortgage interest rates. This includes the current supply and demand.
• Inflation: Mortgage rates tend to rise and fall with the current rate of inflation.
• Federal Reserve’s monetary policies: Although the Fed does not determine housing interest rates, it does set the federal funds rate. Currently, the effective federal funds rate is 5.33%. New Jersey lenders generally refer to this rate when setting their mortgage rates. The higher the federal funds rate is, the higher the mortgage rates tend to be.

Direct factors also determine mortgage rates in New Jersey — that is, factors within your control. This includes:

• Credit score: Lenders will consider your credit score when determining whether to offer you a home loan. If you have good credit or better, you could benefit from a lower interest rate.
• Down payment amount: Most lenders require a minimum down payment before financing a loan. While requirements vary, a larger down payment could result in a lower mortgage interest rate.
• Loan type: The interest rate may vary based on the home loan. Common mortgage loans in New Jersey include conventional, USDA, FHA, VA, and jumbo loans.
• Repayment term: A longer-term loan — such as a 30-year fixed-rate mortgage — may have a higher interest rate than a shorter-term loan.
• Loan amount: A larger loan or more expensive home could have a higher interest rate than a smaller loan.
• Mortgage interest rate type: Home loans come with either a fixed or adjustable interest rate. A fixed-rate mortgage never changes, while an adjustable rate may fluctuate. Adjustable-rate loans may have a lower initial interest rate that increases after a certain amount of time.
• Property location: New Jersey mortgage rates also depend on where the property is located, meaning certain counties or cities may have different rates. Home values in Cape May County, Monmouth County, and Bergen County are currently the highest of all New Jersey counties. So, if you’re thinking about buying property in one of these areas, be prepared for higher housing costs and potentially higher interest rates.

New Jersey has several first-time homebuyers and down payment assistance programs to help individuals afford their first home. These include:

• New Jersey Housing and Mortgage Finance Agency (NJHMFA) First-Time Homebuyer Mortgage Program: This program offers first-time buyers a 30-year fixed-rate FHA, VA, or USDA mortgage with competitive terms. You can combine this program with certain down payment assistance programs. To qualify, you must not have owned property in the past three years. The home must also be located in a New Jersey county and be used as your primary residence. Income limits apply.
• NJHMFA's First Generation Down Payment Assistance Program: This program offers $15,000 to $22,000 in closing costs or down payment assistance. You could qualify if neither your parents nor legal guardians have owned property in the United States. You may also qualify if you or your partner have not owned property in the past three years, or if you've been in New Jersey's foster care system.
• NJHMFA Down Payment Assistance Program: First-time buyers in New Jersey could qualify for up to $15,000 in down payment or closing cost assistance, depending on the property’s location. This is a five-year, interest-free forgivable loan. Income restrictions apply.
• Homeward Bound Program: This program provides 30-year fixed-rate mortgages that are government-insured. To be eligible, you must be a first-time buyer purchasing a home in New Jersey. The property must also be your primary residence. Property type and income limits may apply. This program can be combined with other down payment assistance programs.
• HFA Advantage Mortgage Program: This program helps prospective buyers afford a home in New Jersey through competitive 30-year, fixed-rate conventional mortgage loans. You must be a first-time buyer and have a credit score of 620 or higher to qualify.
• Police and Firemen’s Retirement System Mortgage Program: While not exclusive to first-time buyers, this program can help active firefighters or police officers purchase a home. Only certain property types are eligible.

If you’re trying to get the best mortgage rates in New Jersey, here are some things you should do:

• Improve your credit score: Your credit score is a three-digit number ranging from 300 to 850 (FICO and VantageScore). The higher your score, the better your odds of getting a loan with the best rates and terms. You can improve your credit score by paying off debt, making payments on time, increasing your income, and reviewing your credit report for errors.
• Start saving up for a larger down payment: The larger your down payment, the lower your interest rate could be.
• Determine your budget: Use an online calculator to determine your monthly payment amount and the total cost of the loan. Account for things like the loan amount, term length, interest rate, homeowners insurance, and property taxes. This will help you figure out how much you can afford.
• Shop around for lenders: New Jersey home lenders all have their own loan types, interest rates, fees, and eligibility requirements. Comparing lenders can give you a better idea of your options and help you get the best rates. Make sure the lender you choose is reputable.
• Choose the best loan and interest rate type: Compare different types of loans to see which works best for you. Also, determine whether you want to get a fixed-rate or an adjustable-rate loan.
• Get pre-approved: Getting pre-approved does not guarantee a loan, but it does give you a clearer picture of what you could qualify for. A pre-approval letter also shows sellers that you’re serious about purchasing their property.
• Use discount points: You may be able to lower your mortgage rate by having a larger down payment and using discount points. These points are generally based on the loan amount.

Here are the main types of home loans in New Jersey:

Conventional

• Typical eligibility: 620+ credit score, 3% minimum down payment, 43% maximum DTI
• Typical characteristics: 15- to 30-year repayment terms, fixed or variable interest rate, loan amounts ranging from $726,200 to $1,089,300 in most counties, PMI required if less than 20% down

FHA

• Typical eligibility: Minimum down payment of 3.5% (depending on credit), 500+ minimum credit score, maximum loan limits based on location, may require an upfront MIP
• Typical characteristics: Geared toward first-time buyers, regulated by the FHA, repayment terms range from 15 to 30 years, fixed or variable interest rate

USDA

• Typical eligibility: No minimum credit score, no minimum down payment, income limits may apply, property must be located in a “rural” area
• Typical characteristics: 15- to 30-year repayment terms, fixed interest rate only, offered through the USDA, geared toward buyers with limited savings

Jumbo

• Typical eligibility: May have higher credit score or down payment requirements than conventional loans, other requirements vary by lender
• Typical characteristics: 15- to 30-year repayment term, fixed or variable interest rate, designed for more expensive homes as loan limits tend to be higher than other loans, may be more expensive than other loans

VA

• Typical eligibility: Must meet military service eligibility requirements, no minimum down payment requirement, credit score requirements vary by lender, no PMI required
• Typical characteristics: Repayment terms range from 15 to 30 years, backed by the VA, lower closing costs, competitive fixed or variable interest rate