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Compare mortgage rates in Virginia.
Key Points
• The current mortgage rates in Virginia run pretty close to the national average, sometimes running a bit higher or lower.
• Higher interest rates mean higher monthly mortgage payments, making it more challenging to afford a home.
• Mortgage rates are influenced by economic conditions, Federal Reserve policy, and market supply and demand.
• Virginia offers various mortgage types, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans, each with its own unique features and requirements.
• Homebuyers should carefully consider their financial situation, housing needs, and long-term plans when making decisions about purchasing a home and securing a mortgage.
Introduction to Mortgage Interest Rates
When it comes to securing a home loan, comparing interest rates is important to save money over the life of the loan. Even a slight difference in interest rate can result in significant savings — or added costs.
The interest rate charged on mortgages is a bit of a moving target — a reflection of the current economic climate and the borrower’s financial profile. Lenders assess numerous variables to determine the risk associated with lending money, and this directly influences the interest rate offered to borrowers.
Get ready for a deep dive into mortgage rates: how they’re set, historical trends, and tips for getting the lowest available rate.
Where Mortgage Rates Come From
Whether you’re buying your first home or a long-time real-estate enthusiast, few people know how mortgage rates come about.
The Federal Reserve, also known as the Fed, sets the short-term interest rates that banks use. While home loan rates are not directly tied to Fed rates, they tend to follow similar economic trends. When the Fed raises short-term rates, it often signals a tightening of the money supply, leading to higher borrowing costs across the board, including mortgages.
On the flip side, when the Fed lowers interest rates, it stimulates economic activity and makes borrowing more affordable, which can positively impact mortgage rates.
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 homeownership unattainable for middle-income Americans. For instance, a 1.00% increase in the interest rate on a $200,000 mortgage can add $130 to a monthly mortgage payment. This really adds up over the long term, with borrowers paying an additional $46,500 by the end of a 30-year mortgage.
This added expense can make it challenging for many families to afford a home — or achieve other long-term goals.
Should Homebuyers Wait for Interest Rates to Drop?
Many first-time homebuyers face the dilemma of whether to buy now or wait for interest rates to come down. While it’s tempting to wait for a more favorable interest rate environment, consider the opportunity cost of delaying homeownership. Waiting for rates to drop means missing out on potential home appreciation and the ability to build equity.
The decision of when to buy a home is a complex one, and the allure of waiting for lower interest rates is understandable. However, would-be homebuyers should weigh this against the potential drawbacks of delaying homeownership.
And don’t forget: Homeowners can always take advantage of a mortgage refinance after rates come down. (More on that below.)
Virginia Mortgage Rate Trends
Examining historical mortgage rate trends can offer valuable clues about future rate movements. While rates have risen in recent years, they remain below historical highs. In fact, current rates are hovering around the 50-year average. And as the table below shows, mortgage rates in Virginia run pretty close to the national average, sometimes reaching a bit higher or lower.
By analyzing past rate fluctuations, homeowners and prospective buyers can gain a better understanding of the cyclical nature of mortgage rates and make informed decisions about when to purchase a home or refinance their existing mortgage.
| Year | Virginia Rate | U.S. Rate |
|---|---|---|
| 2000 | 8.03 | 8.14 |
| 2001 | 7.02 | 7.03 |
| 2002 | 6.54 | 6.62 |
| 2003 | 5.82 | 5.83 |
| 2004 | 5.70 | 5.95 |
| 2005 | 5.93 | 6.00 |
| 2006 | 6.54 | 6.60 |
| 2007 | 6.41 | 6.44 |
| 2008 | 6.02 | 6.09 |
| 2009 | 4.97 | 5.06 |
| 2010 | 4.71 | 4.84 |
| 2011 | 4.52 | 4.66 |
| 2012 | 3.67 | 3.74 |
| 2013 | 3.86 | 3.92 |
| 2014 | 4.16 | 4.24 |
| 2015 | 3.96 | 3.91 |
| 2016 | 3.77 | 3.72 |
| 2017 | 3.77 | 4.03 |
| 2018 | 4.10 | 4.57 |
Historical U.S. Mortgage Rates
In the past 50 years, mortgage rates have fluctuated widely, from the peaks in the late 1970s and early 1980s of 18.00% to the valleys in the early 2010s and during the height of the COVID-19 pandemic of under 3.00%.
Factors Affecting Mortgage Rates in Virginia
Numerous factors influence mortgage rates in Virginia and nationwide. As we note above, some of these factors are economic, while others are entirely within the homebuyer’s control. Understanding these factors can empower homebuyers to make informed decisions and secure the best possible mortgage rate.
Economic Factors
Economic factors that impact mortgage rates include the Federal Reserve’s interest rate decisions, inflation, and unemployment rates.
• The Feds: The Federal Reserve, as the central bank of the United States, exerts a profound influence on mortgage rates through its monetary policy decisions. The federal funds rate, which is the interest rate at which banks lend to each other overnight, serves as a benchmark for other interest rates, including those for mortgages. When the Fed raises the federal funds rate, it becomes more expensive for banks to borrow money, leading to higher mortgage rates. Conversely, when the Fed lowers the federal funds rate, borrowing costs decrease, making mortgages more affordable.
• Inflation: Inflation, which refers to the sustained increase in the general price level of goods and services, has a direct impact on mortgage rates. As inflation rises, the purchasing power of money decreases, making it more expensive for lenders to lend money. To compensate for this loss of purchasing power, lenders may increase interest rates to maintain their profit margins. This relationship between inflation and mortgage rates underscores the importance of considering economic conditions when making home financing decisions.
• Unemployment rate: The unemployment rate, which measures the percentage of the labor force that is unemployed, also plays a role in shaping mortgage rates. A low unemployment rate generally indicates a strong economy with a high demand for labor. This economic strength often translates into increased demand for housing, leading to higher home prices and, consequently, higher mortgage rates. Conversely, a high unemployment rate may lead to lower mortgage rates as lenders compete for a smaller pool of qualified borrowers.
Consumer Factors
In addition to economic factors, several consumer-specific factors influence mortgage rates. These include credit score, down payment, income and assets, and the type of mortgage loan.
• Credit score: Your credit score is a numerical representation of your creditworthiness, based on your credit history and repayment behavior. Lenders use credit scores to assess the risk associated with lending money to a particular borrower. A higher credit score indicates a lower risk of default, making borrowers more attractive to lenders. As a result, individuals with higher credit scores typically qualify for lower mortgage interest rates.
• Down payment: The down payment, which is the upfront payment made by the homebuyer toward the purchase of a property, also influences mortgage rates. A larger down payment reduces the amount of money that needs to be borrowed, making the loan less risky for the lender. As a result, borrowers who make a larger down payment often qualify for lower mortgage interest rates.
• Income and assets: Lenders carefully evaluate a borrower’s income and assets when determining mortgage rates. A steady income demonstrates the borrower’s ability to make regular mortgage payments. Additionally, having a substantial amount of assets, such as investments or emergency savings, provides assurance to lenders that the borrower can meet their financial obligations even in challenging circumstances. Borrowers with strong income and asset profiles are often rewarded with lower mortgage interest rates.
• Type of mortgage: The type of mortgage loan selected can also impact the mortgage rate. Adjustable-rate mortgages (ARMs), which offer lower initial rates that can adjust over time, may be attractive to borrowers who plan to sell their home before the fixed-rate period ends. Government-backed loans, such as VA mortgages for veterans and active-duty military members, often come with lower rates compared to conventional loans. Additionally, shorter loan terms, such as 15-year mortgages, typically have lower rates than longer loan terms like 30-year mortgages.
Types of Mortgages Available in Virginia
Virginia offers a variety of mortgage types to meet the needs of different homebuyers, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans. Each type of mortgage has its own unique characteristics, advantages, and disadvantages.
Conventional loans, which are not backed by a government agency, offer flexibility in terms of interest rate types and loan amounts. These loans typically require a credit score of 620 or higher.
Fixed-Rate Mortgage
Fixed-rate mortgages offer the security of a consistent interest rate throughout the life of the loan, ensuring that the principal and interest payments remain constant. This stability is particularly beneficial for homebuyers who prefer predictability and want to lock in a favorable rate for the long term.
Fixed-rate mortgages come with varying loan terms, typically ranging from 10 to 30 years. The choice of loan term significantly impacts the monthly mortgage payment and the total interest paid over the life of the loan. Shorter loan terms, such as 10 or 15 years, result in higher monthly payments but lower total interest paid. Conversely, longer loan terms, such as 20 or 30 years, offer lower monthly payments but result in higher total interest paid.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages (ARMs) initially offer a lower interest rate compared to fixed-rate loans, making them attractive to homebuyers seeking affordability in the short term. However, borrowers should be aware that the interest rate can adjust periodically, potentially leading to higher monthly payments in the future.
The initial low interest rate of ARMs can be a strategic choice for homebuyers who plan to sell their property before the fixed-rate period ends. This allows them to take advantage of the lower rate while they own the home and avoid the potential drawbacks of interest rate adjustments in the future.
FHA Loan
Backed by the Federal Housing Administration (FHA), FHA loans are designed to make homeownership more accessible to borrowers with limited financial resources. FHA loans typically have more lenient eligibility requirements and allow for lower credit scores and smaller down payments compared to conventional loans. FHA loans open up the possibility of homeownership to a broader segment of the population, making the dream of owning a home more attainable.
VA Loans
VA loans are exclusively available to veterans, active-duty military members, some Reserve and National Guard members, and their spouses. These loans are backed by the U.S. Department of Veterans Affairs (VA) and offer competitive interest rates, no down payment requirement, and less stringent credit requirements compared to conventional loans.
VA loans are a testament to the nation’s gratitude and support for those who have served or are currently serving in the military. One of the most significant advantages of VA loans is the elimination of the down payment requirement. This feature is particularly beneficial for veterans and military members who may not have substantial savings or may be transitioning to civilian life.
USDA Loans
USDA loans, provided by the U.S. Department of Agriculture (USDA), are designed to assist low-income borrowers in purchasing homes in rural areas. These loans offer competitive interest rates, no down payment requirement, and flexible credit guidelines, making homeownership attainable for those who may not qualify for conventional loans. By providing access to affordable financing, USDA loans aim to revitalize rural communities, promote economic development, and improve the quality of life for rural residents.
Jumbo Loans
Jumbo loans are designed for borrowers who need to finance homes that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. These loans typically come with higher interest rates and stricter credit requirements compared to conventional loans.
For a single-family home in Virginia, the conforming loan limit for 2024 is set at $766,550 for most counties. However, a handful of higher priced counties have a conforming loan limit of $1,149,825. Mortgages over those amounts require a jumbo loan.
Recommended: What to Know About the Mortgage Preapproval Process
Popular Places to Get a Mortgage in Virginia
Securing a mortgage often depends on choosing the right location, where home prices and the cost of living are favorable. Virginia offers several cities and towns that meet these criteria, making them popular destinations for homebuyers.
Finding the ideal location to purchase a home involves careful consideration of various factors, including affordability, job opportunities, lifestyle preferences, and access to amenities. Virginia offers a diverse range of cities and towns that cater to different needs and budgets, making it an attractive state for homebuyers seeking a favorable mortgage environment.
The cost of living plays a crucial role in determining the affordability of a location. The Cost of Living Index (COLI) provides a valuable tool for comparing the cost of living in different states. By ranking all 50 states against the overall average cost of living in the U.S., the COLI helps homebuyers assess the financial viability of various locations and make informed decisions about where to purchase a home.
Least Expensive Locations
Cost of Living Index (COLI) figures under 100 indicate more affordable areas.
• Danville COLI 69.2
• Martinsville COLI 67.6
• South Boston COLI 74.1
• Emporia COLI 71.6
• Franklin COLI 77.2
Most Expensive Locations
COLI numbers over 100 indicate areas where the average monthly expenses for one person or a family are higher than usual.
• Mclean COLI 149.7
• Arlington COLI 164.3
• Vienna COLI 149.7
• Falls Church COLI 177
• Alexandria COLI 144.7
Recommended: Best Affordable Places to Live in the U.S.
Tips for Securing a Competitive Mortgage Rate in Virginia
A competitive mortgage rate can save borrowers tens of thousands of dollars over the life of a loan. By following these tips, homebuyers in Virginia can increase their chances of securing the best possible mortgage rate.
Compare Interest Rates and Fees
Shop around with multiple lenders before choosing a mortgage. Rates and fees vary significantly.
Grow Your Credit Score
FHA loans require a score of 580 with a low down payment, while a conventional loan will typically require at least 620, but requirements vary by lender.
Make a Larger Down Payment
Some lenders require a 20% down payment for their most competitive mortgage rates.
Lower Your DTI Ratio
Your debt-to-income ratio is the sum of your debt payments divided by your gross income. Lenders want a DTI no higher than 36%, but the lower the better.
Get Preapproved
Getting preapproved for a mortgage demonstrates your seriousness as a buyer and helps you lock in a competitive mortgage rate.
Purchase Points
Discount points are fees that borrowers can pay to reduce the interest rate on their mortgage. Each point costs 1% of the loan amount and can reduce the rate by .25%.
Virginia Mortgage Resources
Virginia offers several programs to assist first-time and repeat homebuyers with getting a mortgage or down payment and closing cost assistance.
Down Payment Assistance
Many down payment assistance programs are available from Virginia Housing. The Plus Second Mortgage pairs a mortgage loan with a second mortgage that borrowers can use to make their down payment. The second mortgage is 3% to 5% of the home’s purchase price. The Down Payment Assistance Grant provides homebuyers with up to 2.5% of the home’s purchase price for their down payment. And the Closing Cost Assistance Grant helps USDA and VA borrowers cover their out-of-pocket costs with a grant of 2% of the home’s purchase price. For eligibility and details, visit the Virginia Housing site
Tools & Calculators
Online tools and calculators can help you estimate your monthly mortgage payments, determine how much you can afford to borrow, and compare different mortgage options. These tools can be valuable resources when planning for a home purchase.
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 Virginia
Refinancing your mortgage can be a way to lower your interest rate, reduce your monthly payments, or access cash for other purposes. There are several refinancing options available in Virginia, including FHA Streamline Refinances, VA Interest-Rate Reduction Refinance Loans, and cash-out refinances.
Closing Costs, Taxes, and Fees in Virginia
Closing costs, taxes, and fees are associated with purchasing a home. These costs can vary depending on the property value, location, and lender. It’s essential to factor these costs into your budget when planning for a home purchase.
The Takeaway
Mortgage rates in Virginia are influenced by economic conditions, Federal Reserve policy, and market supply and demand. Homebuyers should carefully consider their financial situation, housing needs, and long-term plans when making decisions about purchasing a home and securing a mortgage. By comparing interest rates, fees, and available programs, homebuyers can increase their chances of securing a competitive mortgage rate in Virginia.
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 charged by a lender on a mortgage loan. It determines the amount of interest paid over the life of the loan and directly impacts monthly mortgage payments.
Will mortgage rates drop in Virginia?
Predicting future mortgage rate movements is challenging. Various economic factors influence mortgage rates, and it is difficult to accurately forecast whether they will drop or rise.
Will mortgage rates ever go back to normal?
The definition of “normal” mortgage rates varies over time. Mortgage rates have fluctuated throughout history and are influenced by a multitude of economic factors. It is difficult to predict when or if rates will return to a specific level.
Will Virginia home prices ever drop?
Virginia’s housing market is influenced by various factors, including supply and demand, economic conditions, and population growth. Predicting future home price movements is complex and uncertain.
Is it a good time to buy a house in Virginia?
Determining the right time to buy a house involves considering personal financial circumstances, housing market conditions, and long-term goals. There is no one-size-fits-all answer, and it is advisable to consult with a real estate professional or financial advisor for personalized guidance.
How to lock in a mortgage rate?
Locking in a mortgage rate involves obtaining a commitment from a lender to secure the current interest rate for a specific period, typically 30 to 60 days. This protects borrowers from potential rate increases during the home-buying process.
How do mortgage interest rates work?
Mortgage interest rates are determined by various factors, including economic conditions, inflation, unemployment rates, and the Federal Reserve’s monetary policy. Lenders assess these factors to determine the level of risk associated with lending money and set mortgage 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.
SoFi Loan Products
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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Mortgage Preapproval Process