Current Alabama Mortgage and Refinance Rates

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Current 30-year fixed mortgage rates are averaging: 7.25%

Current 15-year fixed mortgage rates are averaging: 6.77%

Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners on the previous day for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.

Compare AL mortgage rates today

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  Refinance rates in Alabama

Current Alabama refinance mortgage rates are trending below national averages. However, the refinance loan you choose will help determine your interest rate.

  • Rate-and-term refinance. A rate-and-term refinance changes your loan repayment term, interest rate or both. This option allows you to extend the term if you need to lower your monthly mortgage payment, shorten it to pay off your home faster or reduce your mortgage rate if current interest rates are lower than your original rate.
  • Cash-out refinance. A cash-out refinance replaces your existing home loan with a larger mortgage based on your available home equity. You’lll receive the difference in a cash payout and can use the funds for any purpose. Cash-out refinance rates are usually higher than rate-and-term refinances.
  • Conventional refinance. Refinance loans that aren’t part of a government-backed program are called conventional refinances. They can be either rate-and-term or cash-out refinances. Conventional refinances usually have lower borrowing costs than government refinance loans, but they’re harder to qualify for.
  • FHA refinance. Refinance loans backed by the Federal Housing Administration (FHA) have more lenient requirements than conventional loans. FHA mortgage rates also tend to be lower, but loan fees, including FHA mortgage insurance, can make them more expensive for borrowers. FHA refinance types include rate-and-term, cash-out and the FHA streamline refinance loan, which requires limited documentation.
  • VA refinance. The U.S. Department of Veterans Affairs (VA) has two refinance options for eligible military borrowers: VA interest rate reduction refinance loan (IRRRL) and VA cash-out refinance. VA refinance loans have lenient borrower requirements and competitive interest rates.

Current 30-year fixed mortgage refinance rates are averaging: 7.42%

The current average rate for a 15-year fixed mortgage refinance is: 6.87%

Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners on the previous day for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
 See whether refinancing makes sense for you using our mortgage refinance calculator.

  What is the current mortgage rates forecast for 2024?

After reaching record-breaking highs in 2023, our mortgage rates forecast predicts interest rates will drop throughout 2024. However, rates will remain relatively high compared to pre-pandemic rates. Industry experts forecast the average interest rate on 30-year fixed-rate conventional mortgages to end the year around 6%, although unforeseen events can drive rates higher or lower. Mortgage rates in Alabama tend to sit below the national average.

How do I get the best mortgage rate for my Alabama home loan?

Several factors determine your mortgage interest rate, and some of which are beyond your control — like economic trends, state laws and local foreclosure rates. Still, there are other factors within your control that can help you get the best mortgage rate:

  1. Boost your credit score. Generally, a higher credit score leads to better mortgage rate offers. Maintain and improve your credit score by making timely loan and credit card payments and keeping your credit utilization low.
  2. Lower your debt-to-income (DTI) ratio. Your DTI ratio measures the sum of your monthly debt payments compared to your gross income. DTI requirements vary by loan type; however, the lower your DTI, the better loan terms you’ll qualify for. You can lower your DTI by paying down debt or increasing your income.
  3. Buy a single-family site-built home. Interest rates vary by property and occupancy type. Rates on single-family homes are generally lower than those on manufactured homes and multifamily properties. Further, they’re also generally lower on primary residences than on second homes or investment properties.
  4. Pay for mortgage points. You can lower your interest rate by prepaying interest, also called buying points. Typically, you can reduce your interest rate by up to 0.25 percentage points for every mortgage point you purchase. This move will increase your closing costs, but saves money over the life of the loan.
  5. Research and compare lenders. One of the best ways to get a competitive interest rate is to research multiple lenders. Shopping around and getting quotes from at least three different lenders could save you tens of thousands of dollars over your loan’s term, according to LendingTree research.
  Read more about our picks for the best mortgage lenders.
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When should I lock in my mortgage rate?

After applying for a mortgage and comparing loan estimates, it’s best to lock in your mortgage rate with the lender you plan to move forward with. A mortgage rate lock protects you from rate increases before closing on your loan. Be sure to ask your lender what their mortgage rate lock terms are, including the fees to extend the lock if needed.

2024 Alabama home loan programs

Alabama homebuyers have multiple resources for affordable mortgage financing and down payment assistance.

AHFA Step Up Program

The Step Up program, offered by the Alabama Housing Finance Authority (AHFA), helps moderate-income buyers get an affordable mortgage and down payment assistance. This program combines a 30-year fixed-rate first mortgage with a 10-year second mortgage for the down payment; buyers make a single payment for both loans.

The first mortgage loan options include conventional, FHA or VA loans. The second mortgage is for 4% of the sales price, up to $10,000. Homebuyers must also complete a homeownership education course and apply through a participating lender.

  Who qualifies?

Borrowers must:

 Have a maximum income of $159,200
 Have a 640 minimum credit score
 Have a maximum 45% DTI ratio
 Live in the home as a primary residence and occupy it within 60 days of closing

Affordable Income Subsidy Grant

Another AHFA program, the Affordable Income Subsidy Grant helps borrowers with closing costs. The program is available to homebuyers getting a conventional loan through the Step Up program and whose annual income is at or below 80% of the Area Median Income (AMI) in their county of residence, as published by Freddie Mac. The grant is either 0.50% or 1% of the loan amount, depending on your income.

  Who qualifies?

Borrowers must:

 Have a household income at or below 80% of their county’s AMI
 Have a 640 minimum credit score
 Have a maximum 45% DTI ratio
 Get a conventional loan through the Step Up program

Mortgage Credit Certificates (MCC)

The Mortgage Credit Certificate program reduces your federal taxes by providing a credit for a percentage of the mortgage interest paid each year. Borrowers can combine the MCC program with other AHFA programs or any 30-year fixed-rate loan offered by a participating lender. Tax savings range from 20% to 50% of your annual mortgage interest, depending on your loan amount.

  Who qualifies?

Borrowers must:

 Be a first-time homebuyer (or not have owned a home in the past three years)
 Meet the program’s income limits
 Purchase a home below the program’s sales price limits
 Live in the home as a primary residence and occupy it within 60 days of closing

Alabama first-time homebuyer programs in 2024

Alabama has multiple first-time homebuyer programs on the city or county level.

  Who qualifies as a first-time homebuyer?

 People who have never owned a home
 People who haven’t owned real estate in the last three years

Huntsville Down Payment Assistance Program

Buyers purchasing a home in Huntsville may be eligible for closing cost and down payment assistance up to $10,000 as a forgivable second mortgage through the City of Huntsville.

  Who qualifies?

Borrowers must:

 Be a first-time homebuyer
 Meet the program’s income requirements
 Purchase a home within Huntsville city limits
 Live in the home for five years to receive total forgiveness

City of Mobile's First Time Home Buyers' Program

Homebuyers purchasing property within the City of Mobile can receive down payment and closing costs assistance up to $15,000 as a forgivable second loan.

  Who qualifies?

Borrowers must:

 Be a first-time homebuyer
 Meet the program’s income requirements
 Purchase a home within the program’s sales price limit
 Occupy the home as a primary residence
 Attend pre-purchase counseling and homebuying education
 Live in the home for five years to receive total forgiveness
 Homes must pass a Housing Quality Standards (HQS) inspection

The City of Opelika Home Buyers Loan Program

Buyers purchasing a home in the City of Opelika may be eligible for closing costs and down payment assistance up to $6,000 as a forgivable second loan.

  Who qualifies?

Borrowers must:

 Be a first-time homebuyer
 Meet the program’s income requirements
 Purchase a home within Opelika city limits
 Occupy the home as a primary residence
 Live in the home for five years to receive total forgiveness
 Complete homebuyer training

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Learn about different types of AL mortgage loans

 Alabama conventional loans. Conventional loans have fewer fees, better terms and lower borrowing costs than other mortgage types. However, their minimum requirements are stricter, as established by Fannie Mae and Freddie Mac. Conventional loans can be used to purchase or refinance a home.

 Alabama FHA loans. FHA loans are easier to qualify for than conventional loans, with a minimum 500 credit score requirement and a 10% down payment — still, you can put down as little as 3.5% if your credit score is at least 580. You can use an FHA loan to purchase or refinance a home.

 Alabama VA loans. Available to veterans, active-duty service members and eligible spouses, VA loans have no down payment requirement or ongoing mortgage insurance. They also include purchase and refinance options.

 Alabama USDA loans. Moderate- and low-income borrowers purchasing in rural areas may qualify for the U.S. Department of Agriculture (USDA) home loan program. USDA loans have no down payment requirement and also offer purchase and refinance options.

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