Current Mortgage Rates - Tennessee

Product (Rate Program)RateAPR
Fixed30Year4.129%4.182%
Fixed20Year4.155%4.249%
Fixed15Year3.567%3.665%
Fixed10Year3.583%3.695%
ARM33.75%4.955%
ARM53.715%4.749%
ARM73.908%4.702%

 

Are you looking for the lowest Tennessee mortgage rates? Getting the best rates on home loans, mortgage refinancing or home equity loans is easiest if you're willing to do a little legwork.

You want to find lenders, compare rates and feel confident in evaluating your choices.  Home loans in Tennessee offer you a lot of options.  You'll need to choose the type of loan that’s right for you, the length of the loan, weigh the combination of rates and fees offered by offered by various lenders and more. 

Don't automatically make assumptions.  Think you might be moving again in a few years? You might consider an adjustable-rate mortgage (ARM) instead of locking in a fixed rate for three decades.  Are you a qualified military veteran or active-duty personnel?  A VA loan is a good option to have, but may not always be your best choice.  First-time homebuyer? You may be better off buying a more modest home you can pay off in 15-20 years at a lower rate rather than maximizing your buying power with a 30-year loan.

MortgageLoan.com has a lot of resources to help you with these decisions and to find the best mortgage rates in Tennessee.  You can start by checking current Tennessee mortgage rates for some of the most popular types of loans just above this article.   Then go to the top and bottom of the page to find links to consumer guides on a broad range of mortgage and real estate topics, or use the search function to find something specific.  We've also got tons of financial and mortgage calculators to help you crunch the numbers to make the best financial decisions and sort through mortgage options to find the best loan for you.

 

Home Loans in Tennessee

The type of home loan you choose will depend on a variety of factors. What's the purpose of the loan (buy a home, refinance, home improvements, etc.)? How much do you need to borrow? What's your financial and credit profile?  How much of a down payment can you make or how much home equity do you have?

Here's a rundown of some of the most common types of home loans in Tennessee:

  • Conforming loans are the most popular type for buying a home or refinancing an existing mortgage.  These are loans that conform to the standards set by Fannie Mae and Freddie Mac, which include things like minimum credit scores, down payment guidelines, rate pricing and more. Loans that conform to those standards are considered fairly low-risk, so they can offer attractive rates and terms.
  • Tennessee FHA loans have less stringent credit requirements than conforming loans do, and often offer better rates for borrowers with lower scores. Down payments can be as little as 3.5 percent of loan amount.  This makes them popular first-time homebuyer loans in Tennessee, as well as an option for others with limited financial resources or less-than-perfect credit.
  • VA loans offer qualified veterans and active duty service members the option of no down payment or mortgage insurance on a home loan; however, a down payment will still allow you to reduce your monthly payments by limiting how much you need to borrow.
  • Jumbo loans are for borrowers who wish to borrow more than is available through a conforming or FHA loan.  Expect to pay higher rates and face stricter credit and down payment requirements.

 

Second Mortgages

Second mortgages are another class of home loan, and fall into two main types for Tennessee borrowers: home equity loans and piggyback loans.

  • A standard home equity loan usually has a fixed rate and allows you to borrow a sum of money that you begin to repay almost immediately. Because they're secured by the equity in your home, they offer lower rates than other, unsecured types of loans. They're often used as home improvement loans or to raise funds for other essential purposes.
  • A home equity line of credit (HELOC) is a special type of home equity loan that gives you a line of credit secured by your home equity that you can borrow against as you wish. This gives them more flexibility than a traditional home equity loan. HELOCs have adjustable rates and are usually interest-only during the period you can draw against them.
  • Piggyback loans are less common than they once were, but are a second mortgage used to cover part of the cost of a home purchase or refinance. They're sometimes used as a substitute for part or all of a down payment, to avoid having to pay for mortgage insurance, or to avoid having to take out a jumbo loan on a purchase that exceeds the limits on conforming loans.

 

Refinancing

Refinancing is simply replacing one loan with another one that offers more desirable terms. The new loan is used to pay off the old one and you go forward from there. Because it's a new loan, you don't have to refinance with the same lender you have now or even get the same type of loan.

Common reasons for refinancing include:

  • Getting a lower mortgage rate than you're currently paying
  • Paying your loan off faster by refinancing to a shorter term
  • Reducing your monthly payment 
  • Changing an adjustable-rate mortgage to a fixed rate
  • Borrowing money through a cash-out refinance

Of these, refinancing to a lower rate is the most common.  Because 15-year mortgages have lower rates than 30-year loans, borrowers who've had a 30-year loan for a number of years often refinance to a 15-year or other shorter-term loan to get a better rate and trim a few years off the loan, which can result in considerable savings in interest.

A cash-out refinance is actually a type of home equity loan where you refinance your mortgage for more than the amount you owe and receive the difference in cash.  It's particularly useful if you can reduce your mortgage rate at the same time. 

Some borrowers will refinance to a longer term to reduce their monthly payments, such as taking out a new 30-year mortgage when they have 20 years remaining on their current one. While this can take pressure off your monthly budget, it will greatly increase what you pay in mortgage interest over the life of the loan, so proceed with caution before doing this.

 

Comparison Shopping

Follow these steps to shop for the best mortgage rates in Tennessee:

  1. Check current Tennessee mortgage rates and compare against rates being offered by individual lenders
  2. Calculate payments and amortization tables for different loan types
  3. Contact lenders and brokers to request quotes
  4. Using a mortgage calculator, determine which loan offers give you the best combination of rate and fees.

There are two more pointers to remember while researching and evaluating your options. First, use advertised loan rates as guidelines only. Usually, only the most qualified borrowers are offered these rates. If you aren't sure how your credit background will affect the rate, browse loan rates by credit profile here. Secondly, remember to compare your options based on written statements of terms, not by a lender's verbal assurances. You'll receive a written description of terms after you submit your loan application. Here's what it comes down to: Tennessee may be the volunteer state, but it's also a great place to buy and finance your dream home.