Mortgage Rates in Michigan — Plus Stats, First-Time Homebuyer Programs and Mortgage Refinancing

The average mortgage interest rate in Michigan is 3.52%, which is 4.6% higher than the national average of 3.37%.

On the flip side, Michigan ranks No. 47 in the country among average mortgage monthly payments at $881 — $371 less than the national average of $1,252.

These details on mortgage rates in Michigan, along with other comparisons and mortgage facts compiled by the LendingTree research team, can aid homebuyers in their new-home search.

Mortgage rates in Michigan, plus more stats on the Great Lake State

Source: LendingTree internal data.
Note: Includes 30-year mortgages closed in 2020. State rankings go from high (1) to low (50) for credit score, mortgage size and monthly payment. State rankings go from low (1) to high (50) for interest rate and APR.

Source: American Community Survey (2019 5-Year Estimates), U.S. Census Bureau.
Note: Real estate taxes are for homes with active mortgages. Home values are estimated by surveyed owners. State rankings go from high (1) to low (50).

When it comes to maintaining a home in Michigan, the Great Lake State (or the Wolverine State) is among the lowest in the U.S. in median monthly housing costs at $1,298, or $297 less than the national average of $1,595. On average, real estate taxes also are lower, with the annual median at $2,553 in Michigan — a drop of $197 from the national average of $2,750.

But mortgage rates and taxes aren’t the only consideration for homebuyers. Having a good credit score is also important. In Michigan, the average borrower credit score is 721, which is 13 points lower than the national average borrower credit score of 734.

Mortgage facts in Michigan’s biggest cities and towns, from Ann Arbor to Wyoming

Looking beyond mortgage rates in Michigan, the research team at LendingTree assembled a variety of mortgage facts ranging from median homeowner costs to median property taxes for Michigan’s biggest cities and towns with at least 50,000 residents. Some cities had very similar factors while others were more separated.

For example, when looking at median homeowner costs, Dearborn Heights is at $1,177, while Westland is at $1,187. Likewise, 73% of Sterling Heights residents have an active mortgage, while 73.8% of Troy residents do, too.

Michigan cities with wider margins include Ann Arbor, which has median homeowner costs of $1,941, and Lansing, where median homeowner costs are $999.

Top 5 and bottom 5 in Michigan

Michigan’s top five and bottom five cities or towns vary significantly in regards to the percentage of those with active mortgages and median property taxes in Michigan. Here’s a closer look.

3 first-time homebuyer programs in Michigan

Through the Michigan State Housing Development Authority, first-time homebuyers can qualify for one of three programs to help them purchase their first dream home.

MI Home Loan

Through the MI Home Loan program, first-time homebuyers may qualify for a mortgage or down payment assistance. Borrowers must complete a homebuyer education class to receive down payment assistance.

Who qualifies?

Eligible applicants must:

• Be first-time homebuyers who haven’t owned a home in the past three years
• Meet household income, as well as sales price limits ($224,500)
• Have a minimum credit score of 640, or 660 for multiple-section manufactured homes

MI Home Loan Flex

The MI Home Loan Flex program offers first-time homebuyers flexibility because it doesn’t require all adults in the household to apply, nor would they necessarily have to pay off any outstanding collections or judgments to qualify. Borrowers may receive up to $7,500 in down payment assistance.

Who qualifies?

Eligible applicants must:

• Meet income limits based on family size and property location, as well as sales price limits ($224,500)
• Have a minimum credit score of 660

Mortgage Credit Certificate Program

With the Mortgage Credit Certificate Program, first-time homebuyers can receive housing assistance in the form of a federal tax credit. If qualified, borrowers can reduce their year-end tax liability by 20% of their annual mortgage interest paid. The credit can be applied every year of the original mortgage loan term.

Who qualifies?

Eligible applicants must:

• Be first-time homebuyers or repeat buyers in a targeted area
• Meet household income limits based on family size and property location, as well as sales price limits ($224,500)

How to refinance your mortgage in Michigan

Mortgage rates in Michigan often fluctuate, so keep tabs on them to see if they drop enough to refinance your mortgage.

Refinancing your mortgage means getting a new mortgage loan to pay off your original loan. The refinance should have a lower interest rate to benefit you financially, which could save you money in two ways: lower monthly payments and a shorter loan term, resulting in paying less interest overall.

It’s important to evaluate how much you’ll save over the life of the mortgage to see if the savings will outweigh the closing costs and fees you’ll have to pay for the refinance. For a good comparison, shop around with at least three different lenders to examine:

• Interest rates
• Closing costs
• Loan terms

Reviewing these factors will give you a clearer picture of whether now is a good time to refinance your mortgage.

Sources

• LendingTree proprietary and anonymized 2020 customer data
• U.S. Census Bureau American Community Survey, 2019 5-year estimates (latest available)