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Compare mortgage rates in Missouri.
Key Points
• Mortgage rates in Missouri have shown fluctuations over the years, but they remain well below historical highs.
• Factors that affect mortgage rates in Missouri include the overall economy, inflation, the Fed’s monetary policy, and the borrower’s credit score and down payment.
• Among the types of mortgages available in Missouri are conventional, Federal Housing Administration (FHA) loans, Department of Veterans Affairs (VA) loans, US Department of Agriculture (USDA) loans,and jumbo loans.
• Mortgage rates tend to follow seasonal trends, with rates skewing higher in spring/summer and lower in fall/winter.
• Popular places to get a mortgage in Missouri: Lake City, Deltona, Palm Bay, Gainesville, Lakeland, Pensacola, Panama City.
Introduction to Mortgage Interest Rates
Securing a mortgage is a key step in the homebuying process, and understanding mortgage rates is essential for making informed financial decisions.
Mortgage rates in Missouri, like anywhere else, are influenced by various economic factors and the borrower’s financial status. This article aims to provide a comprehensive overview of mortgage rates in Missouri, including factors that affect them, types of mortgages available, and tips for securing a competitive mortgage rate.
Where Mortgage Rates Come From
The Federal Reserve, also known as the Fed, plays a pivotal role in setting the short-term interest rates that banks use. Although home loan rates are not directly tied to Fed rates, they tend to follow similar economic trends.
When the Fed’s interest rate is high, chances are mortgage rates will be too. Therefore, it’s important for homebuyers to stay informed about the Fed’s monetary policy decisions, as they can significantly impact mortgage rates.
Economic indicators such as inflation and unemployment rate also influence mortgage rates. Higher inflation can lead to increased borrowing costs for lenders, which may result in higher mortgage rates. A low unemployment rate, on the other hand, can indicate a strong economy and increased demand for housing, potentially pushing mortgage rates upward.
How Interest Rates Affect Home Affordability
Mortgage rates have a more significant impact on home affordability than many people realize. Even small changes in interest rates can make a substantial difference in monthly mortgage payments and the overall cost of buying a home.
For instance, a one percentage point increase in interest rate on a $300,000 mortgage can add thousands of dollars to annual mortgage costs, making homeownership less affordable for middle-income Americans.
Should Homebuyers Wait for Interest Rates to Drop?
Many first-time homebuyers wonder if they should buy now or wait for interest rates to come down. While mortgage rates fluctuate, there’s no guarantee that they will drop in the future. Instead, homebuyers should consider their individual financial situation, housing market conditions, and long-term plans when making a decision about buying a home.
An important side note: Homeowners can always refinance their mortgage after rates come down, potentially lowering their monthly payments. That’s another reason that waiting on an uncertain drop in interest rates may not be the best strategy for everyone.
Missouri Mortgage Rate Trends
Understanding historical mortgage rates can provide valuable insights into where rates are headed. In Missouri, mortgage rates have shown fluctuations over the years, but they remain below historical highs. (The FHFA stopped reporting state interest rates in 2018.)
| Year | Missouri Rate | U.S. Rate |
|---|---|---|
| 2000 | 7.99 | 8.14 |
| 2001 | 7.03 | 7.03 |
| 2002 | 6.62 | 6.62 |
| 2003 | 5.84 | 5.83 |
| 2004 | 5.93 | 5.95 |
| 2005 | 5.90 | 6.00 |
| 2006 | 6.47 | 6.60 |
| 2007 | 6.48 | 6.44 |
| 2008 | 6.14 | 6.09 |
| 2009 | 5.09 | 5.06 |
| 2010 | 5.02 | 4.84 |
| 2011 | 4.55 | 4.66 |
| 2012 | 3.70 | 3.74 |
| 2013 | 3.81 | 3.92 |
| 2014 | 4.15 | 4.24 |
| 2015 | 3.85 | 3.91 |
| 2016 | 3.69 | 3.72 |
| 2017 | 4.07 | 4.03 |
| 2018 | 4.58 | 4.57 |
Historical U.S. Mortgage Rates
Over the last 50 years, mortgage rates have experienced periods of highs and lows. The highest average annual mortgage rate was recorded in 1981 at 18.63%, while the lowest was observed in 2021 at 2.65%. Understanding the extremes may help homebuyers put today’s moderate rates in better perspective.
Factors Affecting Mortgage Rates in Missouri
Numerous factors influence mortgage rates in Missouri and nationwide. Some of these factors are economic, while others are entirely within the homebuyer’s control. Understanding these factors can help homebuyers make informed decisions about their mortgage options.
Let’s explore some of the key factors that affect mortgage rates in Missouri:
Economic Factors
Economic factors play a significant role in determining mortgage rates. Here are a few key economic factors that influence mortgage rates in Missouri:
• The Fed: The Federal Reserve sets the federal funds rate, which serves as a benchmark for other interest rates, including mortgage rates. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, which can lead to higher mortgage rates. The opposite is also true.
• Inflation: Inflation is another economic factor that affects mortgage rates. When inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. As a result, lenders may increase interest rates to compensate for the loss in purchasing power.
• Unemployment rate: The unemployment rate also plays a role in mortgage rates. A low unemployment rate indicates a strong economy, which typically leads to increased demand for housing. This increased demand puts upward pressure on home prices and, consequently, mortgage interest rates.
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Consumer Factors
In addition to economic factors, several consumer-specific factors also influence mortgage rates. These factors include:
• Credit score: Credit score is a major factor that lenders consider when determining mortgage rates. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, individuals with higher credit scores — 740 and above — typically receive lower mortgage interest rates.
• Down payment: The amount of down payment can also impact mortgage rates. A larger down payment reduces the loan amount, which lowers the risk for lenders. Consequently, borrowers who make a larger down payment may qualify for a lower mortgage interest rate. Currently, the median down payment for a house is 15%, according to data from the National Association of Realtors®.
• Income and assets: Lenders also consider the borrower’s income and assets when determining mortgage rates. A steady income and sufficient assets indicate financial stability, making borrowers more attractive to lenders. As a result, borrowers with a stable income and substantial assets may qualify for lower mortgage interest rates. Generally speaking, the income needed to afford a $450,000 mortgage is about $130,000.
• Type of mortgage loan: The type of mortgage loan can also affect the interest rate. Certain types of mortgages, such as adjustable-rate mortgages (ARMs) and government-backed loans like VA mortgages, may offer lower interest rates compared to conventional fixed-rate mortgages. Additionally, shorter loan terms typically come with lower interest rates than longer loan terms.
Types of Mortgages Available in Missouri
Homebuyers in Missouri have access to the full range of mortgage types, each with its own characteristics and benefits. Conventional loans are not backed by the government and are offered by banks and credit unions. They can be fixed-rate or adjustable-rate, and typically require a credit score of 620 or higher..
Here are some of the most common mortgage options available in the state:
Fixed-Rate Mortgage
Fixed-rate mortgage: A fixed-rate mortgage offers a constant interest rate throughout the life of the loan, providing stability and predictability in monthly payments. Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years.
This type of mortgage is ideal for borrowers who prefer the security of a consistent monthly payment and want to lock in a favorable interest rate for the long term.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgage (ARM): An ARM initially offers a lower interest rate compared to fixed-rate loans. However, the interest rate can adjust periodically after a fixed introductory period, based on a specified index. ARMs can be beneficial for borrowers who plan to sell their home before the introductory period ends or who are comfortable with the potential for fluctuating monthly payments.
It’s important for borrowers to carefully consider the potential risks and benefits of ARMs before choosing this type of mortgage.
FHA Loan
FHA loans are insured by the Federal Housing Administration and are designed to make homeownership more accessible to borrowers with limited down payments and less-than-perfect credit. FHA loans typically have more lenient credit and income requirements compared to conventional loans, but they may come with additional fees and mortgage insurance.
FHA loans can be a good option for first-time homebuyers or those with lower credit scores who may not qualify for conventional loans. Borrowers should carefully review the eligibility requirements and associated costs of FHA loans to determine if they are the right fit for their financial situation.
VA Loans
VA loans are available to veterans, active-duty military members, and some Reserve and National Guard members. VA loans offer competitive interest rates and do not require a down payment, making them an attractive option for eligible borrowers. However, VA loans have specific eligibility requirements, including a minimum length of military service and a valid Certificate of Eligibility (COE).
USDA Loans
USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. USDA loans offer competitive interest rates and do not require a down payment. However, USDA loans have specific eligibility requirements, including income limits and property location restrictions.
Jumbo Loan
Jumbo loans are conventional loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In Missouri, the conforming loan limit for a single-family home is $806,500. Jumbo loans are typically used to finance more expensive properties and may have different interest rates and requirements compared to conventional loans.
Popular Places to Get a Mortgage in Missouri
Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are affordable. In Missouri, several cities and towns offer attractive options for homebuyers.
Here are a few popular places to get a mortgage in Missouri:
The largest city in Missouri is relatively affordable compared to other major cities in the U.S. The cost of living is 12% lower than the average cost of living in the U.S.• Kansas City: Another major city in Missouri, St. Louis is known for its affordable housing and diverse neighborhoods. The cost of living is 16% lower than the national average.
• St. Louis: Columbia is a college town located in central Missouri and is home to the University of Missouri. The city offers a vibrant community and a growing economy, attracting homebuyers and investors alike. The cost of living is 10% lower than the national average.
• Columbia: Springfield is a city located in southwestern Missouri and is known for its affordability and outdoor recreation opportunities. The cost of living is 16% lower than the national average.
These are just a few examples of popular places to get a mortgage in Missouri. Homebuyers should carefully research different locations and consider factors such as cost of living and job opportunities when making a decision.
Least Expensive Locations
For homebuyers looking for more affordable housing options, several cities and towns in Missouri offer lower cost of living and attractive mortgage rates.
Some of the least expensive locations in Missouri include:
• Kirksville: Kirksville is a small city located in northeastern Missouri and is known for its low cost of living: 25% lower than the national average. The city offers affordable housing options, with an average home value of $145,000.
• Sikeston: Sikeston is a city located in southeastern Missouri and is known for its agricultural economy and affordable housing. The cost of living is more than 25% lower than the national average, and the average home value is $144,000.
• Rolla: Rolla is a city located in central Missouri and is home to the Missouri University of Science and Technology. The cost of living is more than 20% lower than the national average. The city offers a mix of affordable housing options, with an average home value of $217,000.
If you’re buying your first home, these are just a few examples of places where starter houses are plentiful and quite affordable. Homebuyers should carefully research different areas, compare mortgage rates, and consider factors such as housing availability and job opportunities when making a decision.
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Most Expensive Locations
For homebuyers seeking more luxurious properties and higher-priced neighborhoods, several cities and towns in Missouri offer exclusive housing options.
Some of the most expensive locations in Missouri include:
• Clayton: Clayton is a city located in St. Louis County and is known for its upscale neighborhoods and high-end housing options. The city offers a variety of luxury properties, making it an attractive destination for affluent homebuyers. The average home value is $809,000.
• Lake of the Ozarks: Lake of the Ozarks is a popular vacation destination located in central Missouri and is known for its beautiful scenery and luxury lakefront properties. The average home value is a modest $349,800.
• Branson: Branson is a city located in southwestern Missouri and is known for its entertainment industry and tourism. The city offers a variety of housing options, including luxury properties and vacation homes, making it an attractive destination for homebuyers seeking a vibrant lifestyle. Still, the average home value is just $262,000.
Tips for Securing a Competitive Mortgage Rate in Missouri
Obtaining a competitive mortgage rate can save borrowers thousands of dollars over the life of a loan. Here are some tips for securing a competitive mortgage rate in Missouri:
By following these tips, homebuyers can increase their chances of securing a favorable mortgage rate and achieving their homeownership goals.
Even a small difference in interest rate can have a significant impact on monthly payments and the total cost of borrowing.
Compare Interest Rates and Fees
It’s essential to compare interest rates and fees from multiple lenders before choosing a mortgage. Different lenders may offer varying rates and terms, so shopping around can help borrowers find the best deal.
Borrowers should also inquire about any upfront costs or closing fees associated with the loan to get a clear picture of the total borrowing costs.
By carefully comparing rates and fees, borrowers can make informed decisions and choose the most suitable mortgage option for their financial situation.
Get Preapproved
Getting approved for a mortgage strengthens a homebuyer’s position and allows them to move quickly when they find the right property. Preapproval involves submitting financial information to a lender, who will assess the borrower’s creditworthiness and determine the maximum loan amount they can qualify for. The mortgage preapproval process can take up to 10 days.
Missouri Mortgage Resources
Missouri offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources. These resources can provide valuable information, financial assistance, and support throughout the homebuying process.
Here are some key Missouri mortgage resources:
First-Time Homebuyer Programs
Missouri offers several programs designed to help first-time homebuyers overcome financial barriers and achieve homeownership. These programs may provide down payment assistance, low-interest loans, and other forms of support.
Some notable first-time homebuyer programs in Missouri include:
• Missouri Housing Development Commision (MHDC) First Place program provides a pool of money at below-market interest rates that lenders can use to provide 30-year, fixed-rate FHA, VA, and USDA loans to first-time homebuyers and qualified veterans.
• The MHDC Next Step program allows higher income and purchase price limits for first-time and repeat buyers. A 30-year fixed-rate mortgage can be used along with the mortgage credit certificate, and annual dollar-for-dollar tax credit.
Recommended: How to Qualify as a First-Time Homebuyer
Down Payment Assistance
Down payment assistance programs can help homebuyers overcome the challenge of saving for a down payment, which is often a significant barrier to homeownership. These programs provide financial assistance in the form of grants, loans, or other incentives to help borrowers make a down payment.
Some notable down payment assistance programs in Missouri include:
• The First Place program, noted above, also offers cash and non-cash assistance loans. The cash assistance loan is a second mortgage of 4% of the first mortgage amount that can be used for closing costs and a down payment, and is forgivable after 10 years. The non-cash assistance loan, also forgivable after 10 years, has a lower interest rate and is best for buyers who can pay their own down payment and closing costs.
• Next Step, mentioned above, also gives borrowers the opportunity to receive cash assistance for a down payment and closing costs in the form of a 10-year forgivable loan.
Tools & Calculators
Various online tools and calculators can help homebuyers estimate their monthly mortgage payments, compare interest rates, and calculate affordability. These tools can provide valuable insights and help borrowers make informed decisions throughout the homebuying process.
Some useful tools and calculators available include:
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 Missouri
Refinancing a mortgage can be a strategic move for homeowners looking to lower their interest rate, reduce monthly payments, or access cash for other financial needs. Missouri offers several mortgage refinance options to help homeowners achieve their financial goals.
• FHA Streamline Refinance: This refinancing option is available to homeowners with FHA-insured loans. It allows borrowers to refinance into current mortgage rates with minimal hassle and without the need for a new credit check or appraisal.
• Interest-Rate Reduction Refinance Loans (IRRRL): This refinancing option is available to veterans and active-duty military members with VA loans. It allows borrowers to reduce their monthly payments by adjusting the annual percentage rate (APR) without the need for a new credit check or appraisal.
In addition to these options, conventional refinance loans are also available. Conventional refinance loans are not backed by the government and offer competitive interest rates. However, they may have stricter credit and income requirements compared to FHA and VA refinance loans.
Homeowners considering refinancing should carefully evaluate their financial situation, compare interest rates and fees, and consult with a mortgage lender to determine the best refinancing option for their needs.
Closing Costs, Taxes, and Fees in Missouri
When you buy a home, you will need to pay closing costs, taxes, and fees. These costs can vary depending on the purchase price of the home, the type of loan you get, and the location of the property. Some of the most common closing costs include the loan origination fee, the appraisal fee, the title insurance premium, and the recording fee.
The Takeaway
Getting a mortgage is a big financial decision, so it is important to do your research and compare your options before you make a decision. By following the tips in this article, you can increase your chances of getting the best possible mortgage rate in Missouri.
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
What is a mortgage rate?
A mortgage rate is the interest rate that you pay on your mortgage loan. It is expressed as a percentage of the loan amount.
Will mortgage rates drop in Missouri?
It is difficult to predict whether mortgage rates will drop in Missouri. However, there are a few factors that could affect mortgage rates, such as the overall economy, inflation, and the Federal Reserve’s monetary policy.
Will mortgage rates ever go back to normal?
“Normal” isn’t a term that applies to mortgage rates. It’s important to remember that mortgage rates are cyclical and they will eventually go down again.
Will Missouri home prices ever drop?
It is difficult to predict whether Missouri home prices will drop. However, there are a few factors that could affect home prices, such as the overall economy, supply and demand, and the job market.
Is it a good time to buy a house in Missouri?
Whether or not it is a good time to buy a house in Missouri depends on your individual circumstances. If you are financially stable and you are planning to stay in the area for a long time, it may be a good time to buy a house.
How to lock in a mortgage rate?
You can lock in a mortgage rate by getting a mortgage rate lock from a lender. A mortgage rate lock guarantees that you will get a specific interest rate for a certain period of time.
How do mortgage interest rates work?
Mortgage interest rates are determined by a number of factors, including the overall economy, inflation, and the Federal Reserve’s monetary policy. When the economy is strong and inflation is low, mortgage rates tend to be lower. Conversely, when the economy is weak and inflation is high, mortgage rates tend to be higher.
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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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First-Time Homebuyer Programs and Loans
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Mortgage Preapproval Process