Mortgage and Refinance Rates in Ohio
Use our comparison table to compare refinance and mortgage rates in Ohio
Today's Rates In Ohio
Regardless of whether you're looking for a home loan in Cleveland, refinancing in Columbus, a home equity loan in Cincinnati or a HELOC in Canton, finding and comparing Ohio mortgages and their terms can be a challenge. That's especially true if you're unfamiliar with financial terminology or the differences among various types of mortgage loans and how they work. You may or may not know what APR is, why mortgage interest rates in Ohio may vary, or why the lowest mortgage rate may not be the best deal.
Fortunately, we've assembled an extensive set of resources to help. You'll find everything you need to locate, understand, and compare all of your mortgage offers: current Ohio mortgage rates, informative articles, concise definitions, versatile mortgage calculators, and contact information and rates for mortgage lenders and brokers doing business in Ohio.
You can even get personalized mortgage rate quotes tailored specifically for you, whether you're looking to buy a home, refinance or get a home equity loan or HELOC – just use the form at the top of the page.
First-time homebuyer loan – Ohio
FHA loans have a reputation as the first-time homebuyer's best friend. With low down payment requirements – as little as 3.5 percent, even for borrowers with weaker credit – Ohio FHA loans can make home ownership accessible for those who are just starting out. In addition, Ohio FHA loans will often have better rates for borrowers who are still establishing the credit scores.
That being said, they aren't the only choice for an Ohio first-time homebuyer loan. A first-time homebuyer with good credit might consider a conventional loan backed by Fannie Mae or Freddie Mac. These loans account for most residential mortgages in the U.S. and offer attractive rates and low fees for borrowers with good credit, though their rates are higher for borrowers with lower credit scores. You can also make down payments as small as 3 percent if you have strong credit, and it's easier to cancel private mortgage insurance – required on any mortgage with less than 20 percent down – with a conventional loan than it is with an Ohio FHA loan.
If you're a veteran or current member of the military, VA loans are another great option for a first-time homebuyer loan in Ohio. VA mortgage rates are very competitive, but the best part is that VA loans require no down payment for most first-time borrowers, up to fairly generous loan limits.
Ohio mortgage rates
Mortgage rates can be tricky to understand – why do they seem to vary so much from lender to lender, or from loan to loan? Or why did your neighbor get a different rate than you did, even though you got a home loan the same week they did?
The current Ohio mortgage rates you see near the top of this page are average rates– they aren't the same for every borrower. They can vary depending on a borrower's credit score, down payment, type of loan and more. An FHA loan in Ohio may have a higher or lower rate than the same borrower could get on a conventional loan – it depends on the borrower's profile.
Closing costs are a major reason why Ohio mortgage rates can vary so much from lender to lender, for the same type of loan. Some lenders charge higher closing costs to offset lower rates, which they can advertise to attract customers.
One of the major ways of doing this is through discount points, which are a way of buying a lower rate. Each point costs one percent of the loan amount and lowers the rate by a fraction of a percentage point. Discount points can be an excellent way to save on interest costs on Ohio home loans, especially if you have the loan a long time without refinancing or selling the property. But they also can be used to hide the true cost of a loan – an unusually low rate may include three or more points, and may actually cost you more than a loan with a higher rate.
A good way to compare the true cost of Ohio home loans is through the APR, or annual percentage rate. APR takes both closing costs and the mortgage rate into account, and expresses the cost of the loan as an annual percentage. Particularly for fixed-rate loans, it’s a more accurate way of assessing the cost than simply looking at the mortgage rate. However, it doesn't work very well for adjustable-rate mortgages, as those rates can change over time.
Home Equity Loans
Home equity loans are a popular option for homeowners looking to borrow money. Because they're secured by the equity in your home, home equity loan rates in Ohio are considerably lower than on most unsecured loans. They also offer a lot of flexibility, with standard home equity loans and home equity lines of credit (HELOCs) offering two very different ways to borrow.
With a standard home equity loan, you borrow a sum of money and pay it back. A HELOC, on the other hand, works like a credit card secured by your home – you get a line of credit you can borrow against as needed, in whatever amounts you wish up to the limit. In most cases you don't have to begin repaying the loan balance until a later date. So there's a lot of flexibility there.
A cash-out refinance is yet a third option for borrowing against your home equity. You refinance your mortgage at a higher amount than you presently owe and receive cash out of the transaction. Ohio refinance rates are usually better than the rates on home equity loans, but the closing costs are greater because you're refinancing the whole loan. So a cash-out refinance works best if you're borrowing a large sum or if you can reduce your current mortgage rate in the process.
Adjustable-rate mortgage (ARMs) in Ohio are the loan of choice for borrowers who want a low payment in the early months of the loan. ARMs offer this low initial payment, but the trade-off is the risk of payment increases later on. You might accept this risk if you know that your income will increase, or that you'll sell the home before the initial rate expires. Most commonly, the initial rates remain in force for one, three, or five years.
Knowing some mortgage loan basics will help you enormously in your search for the best rates and programs. APRs, for example, include the mortgage's closing costs, allowing you to compare one mortgage to another, even if the upfront costs are quite different. Also, a mortgage with a low payment doesn't always save you money. It could actually cost you more if the payment is going towards the interest only and not the debt balance. You might also benefit from knowing that mortgages and refinances with shorter pay-off schedules are usually cheaper than loans with longer pay-off schedules.
Are you ready to crunch the numbers? Use our mortgage calculators to see how the various loan types, amounts, and interest rates match up with your budget and your objectives. Are you planning to buy a car soon? Try out a larger loan amount and see if you can afford to finance the car and the house at the same time. Are you moving in three years? Try out an ARM and see if it saves you money. This experimentation is an invaluable part of the mortgage search process. Your final tasks are to contact lenders, submit loan applications, review your offers, and pick the most affordable option. You'll find a full selection of qualified lenders here in our Ohio broker directory.