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Buying a home in Hawaii? Then you better seek out the best mortgage rates you can find. The 50th state boasts some of the priciest real estate in the nation, so carefully comparing and shopping for Hawaii mortgage rates is extra-important.  A fraction of a percentage point on a home in Honolulu can add up to a big difference over time.

Hawaii home loans present a variety of choices, depending on the property involved, how much you're borrowing, your credit score and other factors. Depending on your needs and what you're eligible for, you might go with a conventional loan backed by Fannie Mae or Freddie Mac, an FHA loan, VA loan, jumbo loan, ARM (adjustable-rate mortgage), etc. Hawaii homeowners looking to borrow against their home equity can choose from a standard home equity loan, a HELOC (home equity line or credit) or a cash-out refinance.

 

Finding the best mortgage rates in Hawaii

Different loan options will have different mortgage rates. Hawaii lenders also will vary in the mortgage interest rates they will charge for the same type of loan, sometimes by quite a bit. So it pays to shop around to find the best mortgage, refinance or home equity loan rates in Hawaii.

Current mortgage rates for Hawaii are shown at the top of the page. But those are averages, and not necessarily what an individual borrower will get. To find the best mortgage interest rates for someone with your credit score and financial profile, you want to get personalized quotes from several lenders. You can contact them directly to get prequalified or you can use a form such as the one at the top of this page to obtain personalized quotes from several lenders at once.

When comparing Hawaii mortgage rates, don't simply jump on the lowest rate you can find. Lenders may offer an artificially low rate by charging higher fees that offset the savings you would get from the lower rate.  Discount points are an option by which borrowers can purchase a lower rate by paying higher fees up front – but can also be used by lenders to hide the true cost of a loan.

Be sure to look at both the total cost of the loan – both rates and fees – when comparing mortgage rates in Hawaii. The APR, or annual percentage rate, is a good guide to the total cost of the loan, though it only works with fixed-rate mortgages and is less accurate if you sell the home or refinance before the loan is paid off.

 

Hawaii home loans

Here are some of the most popular options for Hawaii home loans:

Conventional loans:

Also called conforming loans, these are mortgages backed by Fannie Mae or Freddie Mac.  Offered through most banks and mortgage lenders, these are the most common types of mortgages in the United States.  These are well suited to borrowers with good to excellent credit and allow down payments as small as three percent.  Borrowers can use these loans to get up to $721,050 (2018 limit) for a single-family home purchase or mortgage refinance in Hawaii, depending on the location.

FHA loans

Hawaii has special higher lending limits for FHA loans, owing to elevated real estate values there, ranging from $368,000 in Hawaii County to $721,050 in Honolulu County for a single-family home (2018 limits). This makes FHA loans in Hawaii available to a wider range of borrowers than they would be if they were capped at the lower limits in effect for most of the country.

Borrowers with so-so credit or who lack funds for a substantial down payment often find they get their best deal with an FHA loan. Hawaii first-time homebuyers are often attracted to FHA loans for this reason.

VA home loan

Hawaii has a lot of active-duty and former military personnel, so VA loans are a popular mortgage option there. VA mortgage rates are similar to those on conventional loans. For VA home loans in Hawaii, you can borrow up to $721,050 with no down payment in Honolulu and at least $679,650 elsewhere, mirroring the loan limits on conventional loans.  Larger sums can be borrowed by making a down payment equal to 25 percent of the amount over the limit.

HELOC rates

Hawaii homeowners looking to borrow against their home equity generally choose between a standard home equity loan or a home equity line of credit (HELOC). A standard home equity loan lets you borrow a single lump sum of money, while a HELOC gives you a line of credit you can draw against as needed for a number of years before paying it back.  Standard home equity loans often have fixed rates, while Hawaii HELOC rates are adjustable, so they may vary over time.

With a standard home equity loan you begin repaying the loan immediately, while HELOCs are interest-only during the draw period, which provides a certain flexibility in when you repay them.