Understanding 30-year jumbo mortgage rates, where they’re headed and how to get the best APR
Updated 5:57 PM EDT, Wed September 18, 2024
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Current 30-year jumbo mortgage rates were about 6.47% in mid-Sept. 2024, significantly higher than the low rates offered just three years prior. Jumbo rates were also higher than those on 30-year conforming loans, which averaged 6.20%. But following the Federal Reserve’s September decision to cut its target interest rate, you can expect to see 30-year jumbo mortgage rates start to come down.
In most of the United States, the conforming loan limit for 2024 is $766,550, an increase of about $40,000 from 2023. In designated high-cost areas, including Alaska, Hawaii, Guam and the US Virgin Islands, the conforming limit is $1,149,825. Loans that exceed these limits are considered jumbo mortgages and often come with slightly higher interest rates to offset the increased risk to the lender.
We’ll look at current rates on jumbo loans and where to find them, explore past and future rates and tell you how to get the best deal on a jumbo mortgage.
Best lenders offering 30-year jumbo mortgage rates
Most lenders that provide conventional mortgages also offer jumbo loans — though rates, down payment requirements and qualification standards vary widely. Below are the best mortgage lenders, excluding those that don’t offer jumbo loans (from CNN Underscored Money’s May 2024 survey). Many of these lenders offer starting rates below the national average for well-qualified borrowers, but you’ll have to request mortgage preapproval to understand the rates you may receive on a 30-year jumbo mortgage.
| Lender | Star rating | Maximum loan amount | Minimum down payment for jumbo loans |
|---|---|---|---|
| Guaranteed Rate | 5 | $3 million | 5% |
| Pennymac | 4.6 | $3 million | 10.01% |
| Bank of America | 4.5 | $2.5 million | 5% |
| Alliant Credit Union | 4.2 | Undisclosed | Undisclosed |
| Wells Fargo | 4.1 | $3 million | Undisclosed |
| PNC Bank | 3.9 | $5 million | 15% |
| Rocket Mortgage | 3.7 | $2.5 million | 10.01% |
| SoFi | 3.7 | $3 million | 10% |
Current 30-year jumbo mortgage rates
In late Sept. 2024, the average 30-year jumbo mortgage rate was 6.469%, according to FRED data. In contrast, it was just 3.062% at the same time three years prior. This is consistent with the drastic rise in mortgage rates we’ve seen since 2022.
However, lower rates are coming. With inflation cooling and the Fed signaling increased confidence in its economic outlook, it slashed the federal funds rate by 50 basis points (or half a percentage point) in Sept. 2024. While the Fed doesn’t directly set mortgage rates, its policymaking influences the rates lenders set. So, as the Fed’s target rate drops, so too should jumbo mortgage rates.
Here’s a look at current jumbo mortgage rates, and how they’ve changed week-over-week:
At the September average of 6.469%, a 30-year, $850,000 mortgage would result in a monthly payment of $5,355 and a whopping $1.93 million in overall costs.
Jumbo rates vs. conforming loan rates
The primary difference between a jumbo mortgage and a conforming loan is the amount of money being borrowed. Jumbo mortgages carry more inherent risk for lenders due to their size.
Traditional, conforming mortgages can be purchased by government-sponsored entities Fannie Mae and Freddie Mac. Lenders can't unload the jumbo loans they originate to Fannie Mae and Freddie Mac, so they take on added risk for this reason, too.
Because of the additional risk involved, lenders commonly impose stricter requirements on jumbo loan borrowers. And jumbo mortgage rates can be higher than conventional mortgage rates. However, there can be exceptions to this rule — jumbo mortgage rates are sometimes comparable to conforming 30-year mortgage rates.
Jumbo mortgage rate trends
Jumbo mortgage rates follow a similar pattern to conforming mortgage rates. During periods of strong buyer demand (usually a sign of a strong economy), rates tend to rise. When mortgage demand is sluggish, lenders tend to lower their rates.
In mid-2020, mortgage lenders began offering record-low rates in response to the financial crisis triggered by the Covid-19 pandemic. By late December 2020, the average 30-year jumbo mortgage rate hit an all-time low of 2.812%.
In 2022, mortgage rates began to rise due to rampant inflation and Fed rate hikes. Jumbo rates followed suit. By October 2023, less than three years after the record-low rates, the average jumbo mortgage rate hit a record high of 8.232%.
But since April 2024, jumbo mortgage rates have been trending downward. And with the Fed's recent rate cut, we can expect to see them continue to fall.
Related >> Historical mortgage rate trends
Forecasting jumbo mortgage rates: Where are rates headed?
Economic factors and buyer demand are big drivers of mortgage rates, jumbo rates included. A strong economy can lead to inflation — when that happens, the Federal Reserve steps in and raises interest rates, leading to an uptick in mortgage rates.
In early 2022, the federal funds rate (the benchmark interest rate overseen by the Fed) was 0% to 0.25%. But following a series of 11 straight rate hikes, it hit 5.25% to 5.50% in July 2023. Inflation remained stubbornly high, so the Fed kept its target rate at that level until fall 2024. At its September 2024 meeting, the central bank decided to cut the fed rate by 50 basis points (or half a percentage point), dropping it to 4.75% to 5.00%.
Federal Reserve chair Jerome Powell expressed renewed confidence in the state of the US economy and signaled that the Fed may institute another rate drop before the end of 2024. As the fed rate drops, jumbo mortgage rates will follow. While it’s unlikely that we’ll see sub-3% rates again, homebuyers can expect lower rates on all mortgages.
How to get the best 30-year jumbo mortgage rates
The lower your jumbo mortgage rate, the more affordable your payments will be. To snag a competitive rate on a 30-year jumbo mortgage, consider the following tips:
- Improve your credit scores by paying bills on time, using a lower proportion of your credit card limit, maintaining long-standing credit accounts and checking your credit reports for errors by visiting AnnualCreditReport.com.
- Shop around, as different lenders set different rates. Expect to see greater variation between types of lenders, such as banks versus credit unions or online mortgage lenders.
- Make as high a down payment as you can afford to minimize the sum you're borrowing. Jumbo loans commonly require a 20% down payment, but the more, the better. Budgeting can help you leave enough cash flow to afford your monthly mortgage dues.
- Keep your debt-to-income (DTI) ratio as low as possible by paying down debt and boosting your income. Many lenders look for a DTI ratio no higher than 43%, but the lower, the better, especially for a jumbo loan.
To determine your DTI ratio, divide your total monthly debt payments by your gross monthly income. For example, if your debt payments equal $2,000 and you earn $5,000 pre-tax, your DTI ratio would be 40% ($2,000 / $5,000 = 0.40). - Aim for a consistent employment history, which generally means staying at the same job or in the same industry for at least two years. Better yet, seek a promotion and raise to push your DTI in the right direction.
- Explore different loan programs, such as an FHA loan if you have lower credit scores, a VA loan if you're a military member or vet, or a USDA loan if you're buying in a rural area. Jumbo FHA loans exist, but if you have poor credit, exercise caution — be careful not to overextend yourself and accept a loan you can’t afford.
- Pay mortgage points to buy down your rate if you plan to stay in the home for years. One point generally costs 1% of your loan amount and reduces your interest rate by 0.25 percentage points. That rate reduction may not sound like much, but it can add up to big savings over a 30-year term. Start by calculating your break-even point, or the amount of time it’ll take to recoup the cost of buying points — divide the cost of the points by the amount you save each month on your monthly dues.
Example: Let’s say you qualify for an 8% rate on a 30-year term for a $900,000 loan. Your monthly payment would be about $6,600, and you’d pay about $2.38 million over the loan term.
However, if you employed some of the strategies above and qualified for a rate of 7.25% instead, your monthly dues would drop to $6,139 and you’d save more than $167,000 overall.
Pros and cons of a jumbo mortgage
| Pros | Cons |
|---|---|
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Jumbo mortgages make it possible to buy a more expensive home because they don’t have to conform to preset borrowing limits. If you’ve got your eye on a luxury home — and you can afford the payments — a jumbo loan can help you make it yours. Real estate investors also use jumbo loans to capitalize on expensive markets likely to enjoy rapid growth.
Interest rates on jumbo mortgages sometimes mimic those of conforming loan rates, which is the case today. Since the lender has to keep the loan in its portfolio (rather than sell it to Fannie Mae or Freddie Mac), it may be willing to agree to nonstandard repayment terms or other personalized options.
On the other hand, because jumbo mortgages carry more risk, lenders tend to be stricter when assessing your creditworthiness. You’ll probably need a higher income and credit scores to qualify for a jumbo mortgage, and your lender may require a higher down payment at closing. Also, while jumbo mortgage rates can be comparable to conforming mortgage rates, they can sometimes be slightly higher.
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Frequently asked questions (FAQs)
Economic conditions, buyer demand, the federal funds rate, the 10-year Treasury and borrower creditworthiness influence jumbo mortgage rates. A robust economy and strong demand generally mean higher rates, while rates are more likely to fall in a sluggish economy with less demand.
Mortgage rates of all types vary by state. Because fewer lenders offer jumbo mortgages, you might see a bigger variance in rate offers from one state to another (as compared to conventional loans).
Lenders that write jumbo loans can set their own minimum down payment requirements. Many require 20% down at closing, but you may find a jumbo lender willing to take 10% down or even less for especially well-qualified borrowers.
Yes, but just as it may be more difficult to qualify for a jumbo mortgage than a conventional loan, so too might lenders impose higher standards on those seeking to refinance one. Unless, of course, you pay down a jumbo mortgage balance to a conventional/conforming refinance amount — in this case, you can apply for a conventional mortgage refinance.
Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines, hotel chain, or other commercial entity and have not been reviewed, approved or otherwise endorsed by any of such entities.
This content is for educational purposes only and is not intended and should not be understood to constitute financial, investment, insurance or legal advice. All individuals are encouraged to seek advice from a qualified financial professional before making any financial, insurance or investment decisions.
Note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed or may no longer be available.
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