As the home of Silicon Valley, San Jose is known for innovation and high technology. It's also known for sky-high real estate prices. The affluence brought by all those inventive and creative people has given San Jose the third highest per capita income in the world and, by some measures, the most expensive housing market in the United States, with the median home price exceeding $1 million.
So when looking for home loans in San Jose, you have an extra incentive to find the best mortgage rates. While real estate prices are high, mortgage rates in San Jose are pretty much the same as anywhere else. Current mortgage rates in San Jose can vary from day to day and week to week, but the main things affecting the rate you can get will be your credit score, down payment and the size of the loan
Mortgage rates also vary from lender to lender. Lenders structure their loans in different ways, some offering lower rates with higher fees, or vice versa. So you need to look around to find the best combination of rate and fees for you. Don't get hung up on just a low rate – a low rate can sometimes distract you from higher fees that make the loan more costly over the long term.
Mortgage rates in San Jose do tend to run a bit higher than in other areas for buyers with good credit – but that's because a lot of San Jose home loans are jumbo loans, exceeding the loan limits set for conventional mortgages backed by government-affiliated agencies (see below).
FHA loans – San Jose
FHA loans are usually thought of as starter loans for first-time homebuyers. So you may not think of an FHA loan as a likely option in a high-priced market like San Jose. But because home prices there are so high, the loan limits permitted for FHA mortgages in Santa Clara County are the highest allowed anyway in the contiguous 48 states -- $679,650 (2018), a distinction shared by San Francisco, Los Angeles and other high-priced housing markets around the country.
In fact, that same limit is allowed for conforming loans backed by Fannie Mae and Freddie Mac, and is the limit allowed for no-down payment mortgages under the VA loan program.
Comparing San Jose mortgage rates
You need to shop around to get the best deal on your San Jose mortgage or refinance. Here are a few tips to get you started:
- Collect competing offers. You'll save money and protect your interests by shopping with several lenders. Visit our broker directory to find lenders near you.
- Don't decide by mortgage rate alone. A low rate may come with high fees that can offset any savings from the rate itself. Pay particular attention to discount points, which are a form of prepaid interest that allow you to purchase a lower rate. But sometimes a lender will use points to disguise a more costly loan.
- Recognize the differences in loan types. Before you try to compare a fixed-rate loan to an ARM (adjustable-rate mortgage) make sure that you know how these loan structures differ.
- A mortgage calculator can be a big help in comparing different loan offers. Follow the link at left to find our assortment of 19 mortgage calculators designed to help you find the right loan in any situation.
To find the best mortgage or refinance rates in San Jose, shop around to at least three lenders, and preferable more. You can contact them individually and request rate quotes based on your information, or you can use a form such as the one at the top of this page to request quotes from multiple lenders.