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Written by Zach Wichter
On Saturday, March 25, 2023, the national average 30-year fixed mortgage APR is 6.83%. The national average 30-year fixed refinance APR is 6.89%, according to Bankrate's latest survey of the nation's largest mortgage lenders.
Bankrate has offers for Minnesota mortgage and refinance loans from top partners that are well below the national average. Compare, apply, and start saving today.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money.
- Current mortgage rates in Minnesota
- How to find the best mortgage rate in Minnesota for you
- Mortgage options in Minnesota
- First-time homebuyer programs in Minnesota
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Current mortgage rates in Minnesota
After a decade of low rates, mortgage interest rates have climbed to their highest levels since the Great Recession.As of Saturday, March 25, 2023, current interest rates in Minnesota are 6.73% for a 30-year fixed mortgage and 5.99% for a 15-year fixed mortgage.The typical home price in Minnesota is $333,225, well below the national median of $389,500. Home prices in Minnesota were up 4.3 percent year-over-year in August, so you may experience a strong return on your investment if you purchase a home in the state.
Refinance rates in Minnesota
The tight housing market may work in your favor if you're looking to refinance in Minnesota. The equity in your home could rise and make it easier for you to get your refinance application approved. Refinancing is challenging in the current rising-rate environment, but you could save thousands if you shop around and snag a lower rate. Check out the Bankrate Mortgage Refinance Calculator to understand whether refinancing in Minnesota would be a smart move for you.
How to find the best mortgage rate in Minnesota for you
As a Minnesota homebuyer, you can take a number of steps to land a competitive mortgage rate. Improve your credit score if needed and pay down or eliminate debt. The latter helps lower your debt-to-income ratio, the percentage of your monthly income that goes toward repaying debt.
In addition, you can bolster your application with a larger down payment, especially if you have enough to put 20 percent down. You could still qualify for a mortgage with a lower down payment, but you won't get the best possible rate and you'll need to pay for mortgage insurance (depending on the type of loan you get).
Apart from strengthening your application, you could save thousands in lifetime interest costs by shopping mortgage lenders. Talk to at least three lenders; don't just take the first offer and rate you receive.
Mortgage options in Minnesota
If you want to make Minnesota your home, you have several options to choose from. Before you do, make sure you find the type of mortgage that works best for you.
Minnesota conventional mortgages: To qualify for a conventional mortgage, you generally must meet the following requirements.
- Credit score of at least 620
- Debt-to-income (DTI) ratio of no more than 43 percent
- Down payment of at least 3 percent of the loan amount
Minnesota FHA loans: If you don't meet conventional loan requirements, you may qualify for an FHA loan. These are backed by the Federal Housing Administration, and the requirements include:
- Credit score of at least 580 (or 500 with bigger down payment)
- 3.5 percent down payment with a credit score of at least 580
- 10 percent down payment if credit score is between 500-579
- DTI ratio of no more than 50 percent
Minnesota VA loans: Guaranteed by the Department of Veterans Affairs,VA loans are offered to qualifying veterans and active-duty members of the armed forces. VA loans don't require a down payment or mortgage insurance and can be obtained through a VA-approved lender.
First-time homebuyer programs in Minnesota
Minnesota offers first-time homebuyer programs that can help those who haven’t owned a home in the past three years find low-interest mortgages. State programs also offer smaller loans to help pay fees and closing costs.
Minnesota Housing Start Up
If you’re a first-time homebuyer or haven’t owned a home in the past three years, you may be eligible for the Minnesota Housing Start Up program, which includes fixed-interest mortgages with as little as 3 percent down, along with closing cost and down payment assistance loans up to $17,000. To help lower your monthly mortgage payment, the Start Up program also includes low- or no-mortgage insurance options.
To qualify, you must meet Minnesota Housing income limits and purchase price limits ($372,600 in the 11-County Twin Cities Metro and $349,500 in all other counties as of 2022).
Minnesota down payment assistance
- Minnesota Housing Monthly Payment Loan: If you qualify for Start Up or another Minnesota Housing loan, you might be eligible for up to $17,000 towards your down payment or closing costs.
- Minnesota Housing Deferred Payment Loans: Deferred Payment and Deferred Payment Plus loans are also available to first-time homebuyers in Minnesota. The Deferred Payment loan offers up to $12,500 for a down payment or closing costs, while the Deferred Payment Plus option can offer as much as $15,000.