Mortgage Rates - Pennsylvania
When it comes time to buy your dream house, your first house, or your empty-nester house in PA, one of the most important aspects is making sure that you have the best rates for your financial situation.
We would love to connect with you and provide a customized mortgage rate quote so you can buy or refinance your existing home with confidence. Call us at 844-221-3500 or answer a few questions below and we'll be in touch.
Understanding Mortgage Rates
As you think about mortgage rates and what's best for you, it can be helpful to understand how mortgage rates are determined. At its basic level, a mortgage rate is made up of interest rates and points.
Think of interest rates as the amount you pay in order to have access to borrow the actual amount of your home in Pennsylvania. In addition to repaying the principal, you'll pay your lends a predetermined percentage of the principal. Most interest rates are between 2%-6%. Lenders set interest rates to motivate borrowers to repay faster.
There are two types of interest rates — fixed and variable. Traditionally, mortgages have fixed interest rates. With a fixed interest rate, you accept your rate when your buy and it stays the same for the entire term. You could get a new interest rate by refinancing with a second mortgage.
Variable interest rates are less common for mortgages. An adjustable rate mortgage may change every month, quarter, year or longer. While fixed rates bring consistency, variable rates provide opportunities to save if you foresee a rate decline.
The mortgage rate offered to you will be based on several factors including how much of a down payment your are providing, how long you'll be borrowing the money (typically 20 or 30 years for a mortgage), and your likelihood of paying the loan back based on your credit history and other financial factors.
Points are comprised of fees that are paid at your mortgage loan closing, which roll up into your mortgage rate. Mortgage points are a portion of your origination fee, that is being used to reduce the interest rate.
When you take out a mortgage, you have the option to accept or forgo an origination fee that rolls into your mortgage. If you accept the points, you'll divide the total by the term and pay the quotient each month through the end of the term. In exchange, you'll receive a lower interest rate.
While you may pay more during the points term, your savings will kick in after. You'll likely pay points for three to five years but then pay a smaller monthly fee for the remainder of your time in the home.
What Are Pennsylvania's Interest Rates?
Mortgage interest rates depend on numerous factors ranging from the area in which you live to the state of the economy. Rates fluctuate frequently, often changing every day. In Pennsylvania, the Department of Banking and Securities determines a maximum lawful interest rate for residential mortgages. The maximum rate as of July 2022 is 5.5%.
Factors that Influence Mortgage Interest Rates
Mortgage interest rates are subject to fluctuation due to factors in the economic market,
government and your personal financial situation. The following impact interest rates the most significantly:
- The Federal Reserve: The Federal Reserve raises or lowers interest rates to spur or tame inflation. Interest rates are higher when inflation is high.
- The bond market: The bond market has an inverse relationship with interest rates. Bonds are more valuable when interest is low, while interest rates rise when bonds lose value.
- Personal finances: We consider your personal financial situation in addition to the market's rates. You may benefit from a lower interest rate with a higher credit score or a larger down payment. Additionally, rates are often lower for primary residences than investment properties.
- The loan: The type of loan and the term impact interest rates. Options like USDA loans and VA loans have some of the lowest rates. Additionally, a 30-year mortgage will likely have a lower rate than a 15-year mortgage.
Applying for a Home Mortgage with First Commonwealth Bank
We'll help you understand the basic of applying for a mortgage and provide helpful tips like pitfalls to avoid before applying. Also with our Start Smart Pre-Approval program, you can get a jump start ahead of other Pennsylvania buyers, which is especially helpful if you live in an area where homes sell quickly.
Talk with us today about fixed-rate mortgages, adjustable rate mortgages, construction loans and jumbo loans. We also offer programs for first-time homebuyers, Veterans and USDA loans for buying properties in designated rural communities. Submit a pre-approval online so that you are ready when you find the right home or, if you’re ready to buy now, apply online now for your home mortgage.