California Mortgage Rates: California has a sizable mortgage market since it is the most populous state in the nation. Yet, California mortgage rates often remain a little lower than the national average. The conforming loan ceilings in a few pricey California counties are higher than usual. In states with pricey real estate markets, like California’s, monthly mortgage payments are prone to be higher.
Historical California Mortgage Rates
Effective Statistics on California Mortgage Rates
- $648,100 is the median home price (U.S. Census Bureau)
- Funding Ratio for Loans: 58.53% (CFPB)
- 54.2% of Americans own a home (St. Louis Fed)
- Expenses of Homeownership: $2,548 Per Month on Average (U.S. Census Bureau)
Historically, California mortgage rates have been close to or less than those seen in the rest of the nation.
You can prepare for the home-buying process in California by working with a financial counselor. Financial consultants can also assist with investing and financial strategies, such as tax, retirement, and estate planning, to ensure that you are ready for the future.
California Mortgages Rates 2023 Overview
| Year | California Rate | U.S. Rate |
|---|---|---|
| 2000 | 7.18 | 7.86 |
| 2001 | 6.78 | 6.94 |
| 2002 | 6.20 | 6.44 |
| 2003 | 5.54 | 5.67 |
| 2004 | 5.48 | 5.68 |
| 2005 | 5.65 | 5.85 |
| 2006 | 6.49 | 6.54 |
| 2007 | 6.38 | 6.42 |
| 2008 | 6.13 | 6.06 |
| 2009 | 5.08 | 5.05 |
| 2010 | 4.83 | 4.81 |
| 2011 | 4.54 | 4.56 |
| 2012 | 3.69 | 3.65 |
| 2013 | 3.85 | 3.84 |
| 2014 | 4.04 | 4.13 |
| 2015 | 3.80 | 3.88 |
| 2016 | 3.63 | 3.73 |
| 2017 | 3.94 | 4.03 |
| 2018 | 4.38 | 4.56 |
Shopping for a mortgage in another state may not be the same as getting one in California. For starters, California’s high property prices mean that borrowers would require more cash for a down payment and will spend more each month for their homes than they would in states where real estate is more readily available.
Conforming loan ceilings are greater than the average of $726,200 in a few counties in California. You can see how pricey California mortgage rates & Californian homes are from the lengthy list of counties with greater conforming loan restrictions.
Conforming and FHA Loan Limits by County
| County | Conforming Limit | FHA Limit |
|---|---|---|
| Alameda | $1,089,300 | $1,089,300 |
| Alpine | $726,200 | $497,950 |
| Amador | $726,200 | $472,030 |
| Butte | $726,200 | $472,030 |
| Calaveras | $726,200 | $472,030 |
| Colusa | $726,200 | $472,030 |
| Contra Costa | $1,089,300 | $1,089,300 |
| Del Norte | $726,200 | $472,030 |
| El Dorado | $763,600 | $763,600 |
| Fresno | $726,200 | $472,030 |
| Glenn | $726,200 | $472,030 |
| Humboldt | $726,200 | $472,030 |
| Imperial | $726,200 | $472,030 |
| Inyo | $726,200 | $508,300 |
| Kern | $726,200 | $472,030 |
| Kings | $726,200 | $472,030 |
| Lake | $726,200 | $472,030 |
| Lassen | $726,200 | $472,030 |
| Los Angeles | $1,089,300 | $1,089,300 |
| Madera | $726,200 | $472,030 |
| Marin | $1,089,300 | $1,089,300 |
| Mariposa | $726,200 | $472,030 |
| Mendocino | $726,200 | $546,250 |
| Merced | $726,200 | $472,030 |
| Modoc | $726,200 | $472,030 |
| Mono | $726,200 | $693,450 |
| Monterey | $915,400 | $915,400 |
| Napa | $1,017,750 | $1,017,750 |
| Nevada | $726,200 | $644,000 |
| Orange | $1,089,300 | $1,089,300 |
| Placer | $763,600 | $763,600 |
| Plumas | $726,200 | $472,030 |
| Riverside | $726,200 | $644,000 |
| Sacramento | $763,600 | $763,600 |
| San Benito | $1,089,300 | $1,089,300 |
| San Bernardino | $726,200 | $644,000 |
| San Diego | $977,500 | $977,500 |
| San Francisco | $1,089,300 | $1,089,300 |
| San Joaquin | $726,200 | $656,650 |
| San Luis Obispo | $911,950 | $911,950 |
| San Mateo | $1,089,300 | $1,089,300 |
| Santa Barbara | $805,000 | $805,000 |
| Santa Clara | $1,089,300 | $1,089,300 |
| Santa Cruz | $1,089,300 | $1,089,300 |
| Shasta | $726,200 | $472,030 |
| Sierra | $726,200 | $472,030 |
| Siskiyou | $726,200 | $472,030 |
| Solano | $726,200 | $685,400 |
| Sonoma | $861,350 | $861,350 |
| Stanislaus | $726,200 | $517,500 |
| Sutter | $726,200 | $488,750 |
| Tehama | $726,200 | $472,030 |
| Trinity | $726,200 | $472,030 |
| Tulare | $726,200 | $472,030 |
| Tuolumne | $726,200 | $472,030 |
| Ventura | $948,750 | $948,750 |
| Yolo | $763,600 | $763,600 |
| Yuba | $726,200 | $488,750 |
When you take out a mortgage in California, you’ll probably receive a deed of trust rather than an actual mortgage, which is another remarkable aspect of the state’s mortgage industry. According to California law, mortgage lenders that offer loans must use the legal system to foreclose on the property covered by the loan. But if the lender offers a trust deed instead, they can foreclose without spending the time and money to file a lawsuit. A power of sale foreclosure can be started by the lender by engaging a third party to sell the house at auction.
California is a non-recourse state, despite the fact that a borrower’s worst fear could sound like a quicker, easier-on-the-lender foreclosure process. Let’s imagine you get a mortgage, but later on your financial status changes and you are unable to pay back the loan. Your residence has been seized. Also, if the market value of your foreclosed property is currently less than the mortgage debt you owe, this would result in a “deficiency,” or the difference between what you owe the lender and the proceeds from the sale of your home to another party.
In some places, the lender has the right (license) to pursue you for the shortfall. For instance, the lender might seize your earnings or other assets, including your savings account. The amount of taxes you owe might also be impacted by a deficit.
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In California, there is no borrower duty for the shortfall in the event of a power of sale foreclosure. In the unlikely event of a judicial foreclosure (which is exceedingly uncommon in California residential real estate), a judge might issue a deficiency judgment, but this is also quite unusual and might be discharged in bankruptcy. For purchase mortgages for principal properties, Californian judges do not impose deficiency judgments.
30-Year Fixed Mortgage Rates in California
A 30-year fixed-rate mortgage is preferred as the best option of mortgage for a home. Another option with a lower interest rate is a fixed-rate mortgage with a 15-year term. Due to having to repay the same amount of debt in half the time, your monthly payments will be greater.
In California, the average cost of a 30-year fixed-rate mortgage is 5.94%.
California Mortgages Rates: Jumbo Loan Rates
Houses in California often cost more than those in most other states. As a result, more mortgages in California are “jumbo loans,” which are mortgages with larger loan amounts than the conforming lending maximum. Most U.S. counties have a cap of $726,200; however, as was already indicated, certain California counties have higher conforming loan limitations due to the high cost of real estate there. Prepare yourself to pay a higher interest rate if you intend to obtain a jumbo loan for your house mortgage.
Lenders assume the greater risk when they grant jumbo loans to homebuyers. If the homeowner defaults, there is additional money that could be forfeited.
Jumbo loans with a 30-year term typically have an interest rate of 5.92% in California.
California Mortgages Rates: ARM Loan Rates
A mortgage with an adjustable rate is known as an ARM. An ARM often has an interest rate that is lower than a fixed-rate mortgage, at least initially. The initial, introduction period of that lower rate may last one, three, five, seven, or ten years, depending on the loan’s terms. The mortgage interest rate may “adjust,” which usually implies it will increase, after that initial term.
The loan terms for an adjustable-rate mortgage have a cap on how much the interest rate can increase; as a result, your lender cannot suddenly charge you a 20% interest rate when your introductory period finishes.
It’s a good idea to determine your ability to pay the highest interest rate permitted by the loan terms before agreeing to an ARM. You probably wouldn’t want to be forced to continue making payments that are too expensive when your mortgage rate adjusts. In California, a 5/1 ARM’s typical rate is 5.51%.
California Mortgages Rates: Resources
You have options if you require assistance with your California mortgage. For first-time homebuyers with low and middle-class incomes who are applying for their first mortgages, the California Housing Finance Agency (HFA) offers below-market interest rate programs. First-time homebuyers can also receive down payment assistance.
You can get help for current homeowners on the same website if you’ve gone behind on your mortgage and you’re in danger of losing your home to foreclosure. You can get in touch with Keep Your Home California as well. You might be qualified for a principal reduction, assistance with mortgage reinstatement, or transition support if you fulfill the requirements. Under the Home Affordable Modification Program, you could also possibly reduce your monthly payment.
California Mortgages Rates: Tax Details
The ability to deduct mortgage interest when filing your federal income taxes is a well-known benefit of owning a property. Also, you can deduct mortgage interest from your California state income taxes in this state. Since the federal and state mortgage tax regulations are identical, you can deduct twice as much from your taxable income for eligible mortgage interest payments made in a given tax year.
Californians stand to save a significant sum by deducting their mortgage interest because the state’s income taxes are among the highest in the country (in the highest brackets) and the state’s properties are frequently expensive. Keep in mind that the higher your tax rate, the more value you receive from any tax deductions. Deducting $20,000 in mortgage interest will save you more money if you are paying California’s highest income tax rate of 13.3% than it will for someone paying the state’s 6% middle-class tax rate.
Given that California has the highest state income taxes in the US (in the top brackets) and that properties there are frequently pricey, persons who live there can save a significant sum of money by writing off their mortgage interest.
California Mortgages Rates: Refinance
Your California mortgage is prepared for refinancing. The Home Affordable Refinancing Program (HARP), which is no longer in operation, has mostly been replaced by Fannie Mae’s High Loan-to-Value Refinancing Option. If you choose a cash-out refinance to use the equity in your home to pay off debt or for a trip, keep in mind that refinance loans in California are also non-recourse loans.
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