Compare Jumbo Mortgage Rate Offers

Privacy Secured  |  Advertising Disclosures
 

What are jumbo mortgage rates today?

Checking today’s jumbo rates are just a few clicks away. Lenders will offer competitive jumbo mortgage rates if you provide some basic information about your finances and the home you’re financing. You can compare jumbo loan rates and fees to determine the best lender for your jumbo loan needs.

What is a jumbo mortgage?

A jumbo loan is a loan that exceeds the conforming loan limits in your area. The Federal Housing Finance Agency (FHFA) sets conforming loan limits . In 2021, the maximum conforming loan limit is $548,250. If you’re in a high-cost area, the limit is $822,375. Any loan amount above those limits would be considered a jumbo loan.  

You can check the limit for your county here.

How to get the best jumbo mortgage rates

Because lenders typically hold jumbo mortgages in their loan portfolios, they can set interest rates based on their own standards. That means you may find big differences in 30-year jumbo rates offered by different mortgage companies. 

Shopping for jumbo loan rates may save you thousands, if not hundreds of thousands of dollars over the life of a large loan amount. Institutional bank mortgage lenders may offer special rates on jumbo loans to customers with large deposit balances and investment portfolios. Mortgage banks and mortgage brokers may offer a variety of different jumbo loan programs for unique employment scenarios.

Understanding a jumbo mortgage

Jumbo vs. conforming loan

If you’re buying an expensive home near or in a major city, you’ll probably hear the terms “jumbo loan” and “conforming loan.” A conforming loan meets guidelines and loan limits set by two government-supported enterprises: Fannie Mae and Freddie Mac

A jumbo loan is a “non-conforming loan,” which means government-sponsored agencies don’t set the qualifying requirements.

What are jumbo mortgage requirements?

Lenders typically set stricter qualifying guidelines for jumbo mortgages. Jumbo mortgage requirements may include:

      • A down payment of at least 20% 
      • A minimum credit score of 700 or higher
      • A debt-to-income (DTI) ratio of 45% or lower
      • A maximum loan amount of $1 to $2 million

Because jumbo loans don’t adhere to rules set by a government agency, some lenders offer niche jumbo programs for borrowers with unusual circumstances such as:

    • Loans requiring minimal income documentation
    • Loans with interest-only payments 
    • Loans for wealthy customers with complex finances such as doctors or self-employed borrowers

30-year fixed-rate jumbo vs. 15-year fixed rate jumbo loans

Deciding between a 30-year fixed jumbo loan and a 15-year fixed-rate jumbo loan comes down to how much you can qualify for. The table below gives you an idea of the payment difference between a 30-year jumbo rate at 3% and a 15-year jumbo rate of 2.5% on a $1 million loan amount.

Loan Amount Loan Term Monthly Principal and Interest Payment
$1,000,000 30 Years $4,216.04
$1,000,000 15 Years $6,667.89

 

Many jumbo lenders offer adjustable-rate mortgage (ARM) options with a lower initial rate that usually lasts for three, five, seven or 10 years. After the initial fixed-rate period ends, the rate changes based on the terms of your ARM agreement. 

Some jumbo lenders even offer an interest-only option for jumbo loans. Once the interest-only period ends, you pay the remaining balance in installments for the rest of the loan’s life, which could be a shock to your budget if you don’t pay your loan balance down before the bigger payments begin.

How do jumbo loans work?

The mechanics of jumbo loans are the same as any other type of mortgage loan. Lenders verify income, assets and credit to determine if you can repay the loan. 

However, the credit standards are higher and you may need to verify enough assets to meet the lender’s “mortgage reserve” requirement. Also known as “cash reserves,” mortgage reserves must come from a liquid account, which means you can quickly turn all or a portion of the asset into cash. 

To approve a jumbo loan, a lender typically must:

    • Verify enough stable income to qualify
    • Confirm a credit score between 700 and 740, depending on your loan amount
    • Document enough funds for a down payment
    • Document up to 18 months’ worth of cash reserves in a liquid account
    • Verify the value of the home, sometimes using more than one home appraisal