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Compare mortgage rates in Colorado.
Key Points
• Over the last 25 years, mortgage rates in Colorado peaked in 2000 at 7.81% before dipping to 3.65% in 2016 — and then even lower in early 2021.
• While market conditions do affect mortgage rates in Colorado and nationally, a borrower’s financial history also plays a big part.
• Types of mortgages available in Colorado: fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, USDA loans, and jumbo loans.
• Seasonal trends in Colorado mortgage rates: higher in spring and summer, lower in fall and winter.
• Tips for securing a competitive mortgage rate in Colorado: Compare interest rates and fees, get preapproved for a mortgage, and put down the largest down payment you can afford.
Introduction to Mortgage Interest Rates
In an April 2024 survey, SoFi asked 500 would-be homebuyers what they considered to be the most important factors in choosing a mortgage lender. Far and away, interest rates won out, with 64% of people saying rates were a key consideration. Mortgage rates are constantly fluctuating, influenced by various economic and consumer factors. Here, we provide an overview of current mortgage rates in Colorado, exploring the factors that shape them and offering insights into available mortgage options and resources.
Where Mortgage Rates Come From
The Federal Reserve, also known as the Fed, plays a central role in how mortgage rates are set. The Fed determines the short-term interest rates that banks use. Although home loan rates aren’t directly tied to Fed rates, they follow the same economic trends. When the Fed cuts interest rates, chances are mortgage rates will drop too.It’s important to note that mortgage rates are not solely determined by the Fed’s actions. Other economic factors, such as inflation and unemployment, also influence mortgage rates. More important to homebuyers, your financial profile dictates the mortgage rates you’re offered, including your income and assets, credit score, and history of paying off debt.
How Interest Rates Affect Home Affordability
Mortgage rates have a bigger impact on home affordability than people realize. Even small interest rate changes can put homeownership out of reach for middle-income Americans.
For instance, a one-percentage-point increase in interest rate on a $300,000 mortgage can add almost $200 to the monthly mortgage payment. Over the life of a 30-year loan, that translates to $70,000 dollars in additional interest paid.
No wonder savvy homebuyers carefully consider interest rates when making a home purchase decision.
Should Homebuyers Wait for Interest Rates to Drop?
If you’re buying your first home, you may wonder if you should buy now or wait for interest rates to come down further. There’s no easy answer to this question, as it depends on your individual circumstances.
But waiting for interest rates to drop can be a gamble. While rates may indeed decrease in the future, there’s no guarantee of when or by how much. Additionally, home prices may also appreciate during this waiting period, potentially offsetting any savings from lower interest rates.
On the other hand, buying now may allow you to lock in a manageable interest rate and start building equity in your home. If rates do drop in the future, you can always refinance your mortgage to take advantage of lower rates.
Colorado Mortgage Rate Trends
How low can Colorado mortgage rates go? After four years of hiking rates in response to inflation, the Fed cut 0.50% from its benchmark rate in September 2024. Experts believe more cuts are to come, possibly into 2025. Let’s look back at the historical data.
Historical Interest Rates in Colorado
In Colorado, mortgage rates have ranged from a high of 7.81% in 2000 to a low of 3.65% in 2016 — a bit lower than the national average.
| Year | Colorado Rate | U.S. Rate |
|---|---|---|
| 2000 | 7.81 | 8.14 |
| 2001 | 6.91 | 7.03 |
| 2002 | 6.28 | 6.62 |
| 2003 | 5.54 | 5.83 |
| 2004 | 5.56 | 5.95 |
| 2005 | 5.74 | 6.00 |
| 2006 | 6.52 | 6.60 |
| 2007 | 6.40 | 6.44 |
| 2008 | 6.00 | 6.09 |
| 2009 | 5.06 | 5.06 |
| 2010 | 4.88 | 4.84 |
| 2011 | 4.67 | 4.66 |
| 2012 | 3.67 | 3.74 |
| 2013 | 3.87 | 3.92 |
| 2014 | 4.13 | 4.24 |
| 2015 | 3.89 | 3.91 |
| 2016 | 3.65 | 3.72 |
| 2017 | 3.97 | 4.03 |
| 2018 | 4.55 | 4.57 |
Historical U.S. Mortgage Rates
Understanding historical mortgage rates can provide valuable insights into where rates are headed. Over the past 50 years, national mortgage rates have fluctuated significantly, ranging from lows of around 3.00% in the early 1970s to highs of over 18.00% in the early 1980s. More recently, when rates were rising, they still remained well below historical highs. Indeed, current mortgage rates are around the 50-year average.
Factors Affecting Mortgage Rates in Colorado
Numerous factors influence mortgage rates in Colorado and nationwide. Some of these factors are economic, but others are entirely within the homebuyer’s control.
Understanding these factors can help homebuyers make informed decisions about their mortgage options. Let’s dive into some of the key factors that impact mortgage rates:
Economic Factors
Economic factors play a significant role in shaping mortgage rates. Here are a few key economic factors to watch:
• The Fed:As noted above, the Fed’s rate decisions have a profound impact on mortgage rates. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, which leads to higher mortgage rates. Conversely, when the Fed lowers the federal funds rate, borrowing becomes cheaper, potentially resulting in lower mortgage rates.
• Inflation:Inflation also affects mortgage rates. When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, they may increase interest rates to compensate for the reduced value of their loans.
• Unemployment rate:Unemployment also moves the needle on mortgage rates. A lower unemployment rate generally indicates a strong economy, which can lead to increased demand for housing. This increased demand can put upward pressure on mortgage rates.
Consumer Factors
Don’t underestimate how your financial behavior can impact the interest rates you’re offered — for auto loans, personal loans, and mortgage loans.
• Credit score: Your credit score goes a long way in determining your mortgage rate. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, borrowers with higher credit scores typically receive lower mortgage interest rates.
• Down payment: The size of your down payment can also affect mortgage rates. A larger down payment reduces the amount of money you need to borrow, which lowers the risk for the lender. As a result, borrowers who make larger down payments may be eligible for lower mortgage interest rates.
• Income and assets: Income and assets are also considered when determining mortgage rates. A steady income and sufficient assets demonstrate the borrower’s ability to repay the loan, making them more attractive to lenders. As a result, borrowers with stable income and substantial assets may be eligible for lower mortgage interest rates.
• Type of mortgage loan: The type of mortgage loan you choose can also impact the interest rate. Certain types of loans — such as adjustable-rate mortgages (ARMs) and government-backed loans like FHA and VA loans — may offer lower interest rates compared to conventional fixed-rate mortgages. Additionally, shorter loan terms typically come with lower interest rates than longer terms.
Types of Mortgages Available in Colorado
Now that you know certain types of mortgages can offer lower rates, it’s time to review the main categories of mortgage loans.
Fixed Rate Mortgage
A fixed-rate mortgage offers stability and predictability in terms of monthly payments. The interest rate remains the same throughout the entire loan term, which can be 10, 15, 20, or 30 years. This type of mortgage is ideal for borrowers who prefer consistent monthly payments and want to lock in a favorable interest rate.
The choice of loan term depends on your financial situation and preferences. Shorter loan terms generally come with lower interest rates but higher monthly payments, while longer loan terms offer lower monthly payments but higher total interest paid over the life of the loan.
Adjustable Rate Mortgage
An adjustable-rate mortgage (ARM) offers a lower initial interest rate compared to fixed-rate mortgages. However, the interest rate can adjust periodically, typically after a fixed introductory period of 5, 7, or 10 years. ARMs can be beneficial for borrowers who plan to sell their home before the fixed-rate period ends or who expect interest rates to remain low in the near future.
The initial interest rate on an ARM is usually lower than the prevailing fixed-rate mortgage rate, making it an attractive option for borrowers looking to save money upfront.
However, it’s important to understand that the interest rate on an ARM can increase after the introductory period, potentially leading to higher monthly payments.
FHA Loan
FHA loans are backed by the Federal Housing Administration and are designed to make homeownership more accessible to borrowers with lower credit scores and limited down payment funds. And yet in SoFi’s 2024 survey, only 49% of homebuyers had heard of FHA loans.
FHA loans require a minimum credit score of 580 for a 3.5% down payment and a minimum credit score of 500 for a 10% down payment. The maximum loan amount for FHA loans varies depending on the county and property type.
VA Loans
VA loans are offered by the U.S. Department of Veterans Affairs and are available to eligible veterans, active-duty military members, and certain surviving spouses. VA loans offer competitive interest rates and do not require a down payment. To qualify for a VA loan, you must meet certain service requirements and have a valid Certificate of Eligibility (COE).
USDA Loans
USDA loans are offered by the U.S. Department of Agriculture and are designed to assist low-income borrowers in purchasing homes in rural areas. USDA loans offer competitive interest rates and do not require a down payment, making them an excellent option for eligible borrowers. In SoFi’s survey, only 4 in 10 buyers (41%) had heard of USDA loans.
Jumbo Loans
Jumbo loans are conventional mortgages that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In many areas of Colorado, the conforming loan limit for a single-family home is $766,550. In higher priced neighborhoods, the limit is $1,149,825. Jumbo loans typically have higher interest rates and stricter credit and income requirements compared to conventional loans.
Popular Places to Get a Mortgage in Colorado
Securing a mortgage often depends on choosing the right location, where home prices are affordable and mortgage terms are favorable. Here are a few popular places to get a mortgage in Colorado:
• Denver: Denver is the capital and most populous city in Colorado. It offers a diverse range of housing options and a strong economy, making it an attractive location for homebuyers. Average home value: $559,014, down 0.9% YOY.
• Boulder: Boulder is a college town known for its beautiful scenery, outdoor recreation opportunities, and strong job market. It’s a popular choice for families and professionals seeking a high quality of life. Average home value: $974,244, down 0.2% YOY.
• Colorado Springs: Colorado Springs is a city located in the Rocky Mountains and is known for its military presence, outdoor activities, and growing tech industry. It offers a mix of affordable housing and desirable neighborhoods. Average home value: $452,001, up 0.6% YOY.
• Fort Collins: Fort Collins is a city located in northern Colorado and is known for its strong economy, outdoor recreation opportunities, and vibrant arts scene. It’s a popular choice for families and young professionals. Average home value: $558,282, up 1.3% YOY.
When considering these locations, it’s important to factor in the cost of living. The Cost of Living Index (COLI) compares the average monthly expenses for one person in different cities and states to the national average. A higher COLI indicates a higher cost of living.
Recommended: The Cost of Living in the U.S. by State
Least Expensive Locations
Some of the least expensive places to get a mortgage in Colorado include:
• Pueblo: Pueblo is a city located in southern Colorado and is known for its mild climate, historic architecture, and affordable housing. Average home value: $291,787, down 1.6% YOY.
• Grand Junction: Grand Junction is a city located in western Colorado and is known for its beautiful scenery, outdoor recreation opportunities, and growing economy. It offers a mix of affordable housing and desirable neighborhoods. Average home value: $402,274, up 3.7% YOY.
• Greeley: Greeley is a city located in northern Colorado and is known for its strong agricultural economy, affordable housing, and diverse population. Average home value: $421,303, up 0.4% YOY.
Recommended: Best Affordable Place to Live in the U.S.
Tips for Securing a Competitive Mortgage Rate in Colorado
Securing a competitive mortgage rate can save you tens of thousands of dollars over the life of your loan. Here are a few tips to help you get the most competitive rate:
• Compare interest rates and fees: Take the time to compare interest rates and fees from multiple lenders. Be sure to ask about any upfront costs or closing fees associated with the loan. It also helps to look at customer service ratings and reviews.
• Get preapproved: Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property.
Recommended: What to Know About Getting Preapproved for a Home Loan
• Improve Your Credit Score: A credit score of 740 or above can translate to a lower mortgage rate. Take steps to improve your credit score, such as paying bills on time, reducing debt, and reviewing your credit report for errors.
• Make a Larger Down Payment: Increasing your down payment may reduce your mortgage interest rate. In 2024, borrowers’ median down payment is 15%. With a down payment of 20% or more, you’ll also save money by avoiding private mortgage insurance.
Colorado Mortgage Resources
Colorado offers resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. (Don’t forget that to qualify for a first-time homebuyer usually means you haven’t owned a primary residence within the last three years.)
First-Time Homebuyer Programs
Colorado offers several programs to help first-time homebuyers save for a down payment and qualify for a mortgage. These programs include the Colorado Housing and Finance Authority (CHFA) FirstStep and FirstStep Plus. Qualified borrowers get a 30-year fixed-rate FHA loan along with the ability to get a deferred second loan to put toward their down payment or closing costs.
Down payment assistance
Several down payment assistance programs are available in Colorado to help homebuyers with limited funds. These programs include the Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance Program.Tools & Calculators
SoFi provides online tools and calculators to help homebuyers estimate their monthly mortgage payments, resources to determine their eligibility for assistance programs and compare different loan options. These resources can empower homebuyers to make informed decisions throughout the homebuying process.
Run the numbers on your home loan.
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Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
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Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
Provide us with a few details and see how much you can afford to spend on a home purchase.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Refinancing Options in Colorado
Refinancing your mortgage can be a smart way to lower your interest rate, reduce your monthly payments, or cash out some of your home equity. Here are a few mortgage refinance options available in Colorado:
• FHA Streamline Refinance: This program allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle. It offers reduced documentation requirements, and no appraisal is required.
• Interest-Rate Reduction Refinance Loan: This loan allows VA loan borrowers to reduce their monthly payments by adjusting the APR. It requires a credit check and appraisal but offers competitive interest rates.
Closing Costs, Taxes, and Fees in Colorado
Closing costs are fees associated with buying a home and obtaining a mortgage. In Colorado, buyers can expect to pay between 2% and 5% of the home’s purchase price in closing costs. These costs may include:
• Loan origination fee: Charged by the lender for processing the mortgage application.
• Appraisal fee: Paid to an appraiser to determine the value of the home.
• Credit report fee: Paid to a credit bureau for obtaining your credit report.
• Title insurance: Protects the lender against any claims on the title to the property.
• Recording fee: Paid to the county to record the mortgage documents.
The closing costs you pay will vary depending on the purchase price of the home, the type of loan you obtain, and the lender you choose. It’s important to factor these costs into your budget when buying a home.
The Takeaway
Colorado offers a range of options for homebuyers, from conventional fixed-rate loans to government-backed mortgages with more lenient credit requirements and low down payments. By staying informed about current mortgage rates, exploring assistance programs, and working to build your financial profile, you can achieve successful homeownership.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.FAQ
Will mortgage rates drop in Colorado?
Following the first rate reduction in 2024, a decrease in mortgage rates is anticipated. Economists also expect additional rate cuts, which should further reduce mortgage rates into 2025. However, nothing is certain: Mortgage rates are influenced by various economic factors, as well as by homebuyers’ financial profile.
Will mortgage rates ever go back to normal?
The definition of “normal” mortgage rates can vary depending on individual perspectives and historical contexts. In spite of expected rate reductions by the Fed, the exceptionally low rates seen in 2021 are not predicted to return in the near future.
Will Colorado home prices ever drop?
Colorado home prices have generally been on an upward trend in recent years. However, real estate markets are cyclical and can be influenced by various factors such as housing supply and demand and local market dynamics. While prices may experience temporary fluctuations or corrections, long-term trends are difficult to predict with certainty.
Is it a good time to buy a house in Colorado?
The decision of whether it’s a good time to buy a house in Colorado depends on your individual circumstances and financial goals. Factors to consider include your income, savings, credit score, current mortgage rates, and housing market conditions. That said, it’s as good a year as any.
How do mortgage interest rates work?
Mortgage interest rates are influenced by various factors, including the Fed’s interest rate decisions, inflation, unemployment, and the borrower’s credit score, down payment, income, and type of mortgage loan. Lenders use these factors to assess the risk associated with lending money and set interest rates accordingly.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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More home loan resources.
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First-Time Homebuyer Guide
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