| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | N/A | N/A |
| 15-year fixed | N/A | N/A |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
New York has something for everyone. You can enjoy a taste of the Big Apple or take in the slower pace of upstate. Here’s what you need to know about the mortgage rates New York has to offer.
The Best Mortgage Lenders in NY:
- Best Overall in NY: Rocket Mortgage®
- Best for First Time Home Buyers in NY: Chase
- Best For Customer Service: United Mortgage Corp.
- Best for Veterans: Veterans United
- Best for Lower Credit Scores: Freedom Mortgage
- Best for Bank Statement Only Loans: CrossCountry Mortgage
What is a Mortgage Rate?
Lenders charge interest for loans. It’s how they make a profit and it covers the cost of servicing your loan. Your mortgage rate is the amount of interest your lender charges for your home loan. Interest rates on mortgages tend to be low when compared to other types of loans. Your home serves as collateral for the loan.
Collateral is an item that secures the loan. If a borrower doesn’t pay on a loan, the lender takes back the collateral. With a mortgage, lenders can take back a home if a borrower doesn’t pay. This makes it a lower risk to the lender, so lenders can offer lower rates.
What Factors Impact Your Mortgage Rate?
Mortgages vary from person to person and from lender to lender. Economic factors impact interest rates for everyone. Your financial background and situation impact the interest rate lenders offer you. The factors that impact your interest rate include:
- Inflation: Inflation refers to how goods increase in cost over time. You might remember a time when gas or bread was significantly cheaper than it is today. Inflation causes those prices to rise. Mortgages last for a long time, so lenders need to be sure mortgage rates will keep up with inflation over decades.
- The unemployment rate: The unemployment rate indicates the strength of the economy. Higher unemployment means more people are looking for work and the economy isn’t doing well. Interest rates tend to drop when the economy is sluggish to encourage people to buy homes. When unemployment is low, interest rates are higher. More people can buy homes, so there’s more competition for funding.
- Your credit history: Lenders look at how you’ve handled credit in the past to decide how risky it is to lend you money. If you’ve paid your credit cards and loans on time, you’ll have a stronger credit history. If you’ve missed payments or had accounts go to collections, you might be offered a higher interest rate.
- Your down payment: You might be offered a lower interest rate If you can make a down payment of 20% or more. A larger down payment from you means less risk for the lender.
You can save thousands over the life of your mortgage with a lower interest rate. If your initial interest rate isn’t ideal, you can always get a refinance quote down the road.
What is a Mortgage Type?
As you get refinance or purchase quotes, you’ll see different types of mortgages. Here are the most common:
- FHA: The Federal Housing Administration backs FHA mortgages. These mortgages have a low minimum down payment of 3.5%. FHA mortgages also have low credit score requirements. To make a 3.5% down payment, borrowers can have a credit score as low as 580. Borrowers can have a credit score as low as 500 if they can make a down payment of 10% or more.
- USDA: The U.S. Department of Agriculture insures USDA mortgages. These mortgages have income limitations, but if you qualify you can use one to buy a home in a rural area. You don’t have to make a down payment with a USDA mortgage.
- VA: VA mortgages are government-backed loans for qualifying veterans. If you are eligible, you can get a mortgage with no down payment and a reasonable interest rate.
- Conventional: A conventional mortgage is a mortgage that isn’t insured by the federal government. Instead, lenders take on the full risk. This means that they have higher credit score requirements than government programs. Lenders vary on the exact requirements, though. Some may allow down payments lower than 20% while others may not.
FHA, USDA and VA mortgages are all offered through private lenders and approved by the government agency backing the mortgage program.
What is a Mortgage Term?
A mortgage term is how long your mortgage will last if you make the minimum monthly payments. Common mortgage terms include:
- 30-year fixed: A 30-year fixed-rate mortgage will last 30 years if you don’t make any extra payments. The fixed rate means that the interest rate — and your minimum monthly payment — remain the same for all 30 years.
- 15-year fixed: A 15-year fixed-rate mortgage will last 15 years, assuming you only pay the minimum each month. It also has a consistent interest rate for the entire term. After 15 years, you own the home outright.
- 5/1 ARM: A 5/1 ARM is a type of adjustable-rate mortgage. These mortgages have a fixed rate for a 5-year introductory period. After that, the lender adjusts the rate up or down depending on market conditions. The interest rate changes once per year.
A 30-year fixed-rate mortgage has lower monthly payments than a 15-year fixed-rate mortgage. You pay more in interest over time, though.
Current Mortgage Rates in New York
Mortgage rates change daily. Lenders adjust their rates up or down based on market conditions. At Benzinga, we update our rates frequently to show you the most relevant data. Here are the current mortgage rates in New York:
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | N/A | N/A |
| 15-year fixed | N/A | N/A |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Calculating Interest in NY
When you make your monthly mortgage payment, part of it goes toward interest. The rest goes toward your mortgage balance, property taxes and other expenses like homeowners insurance. Lenders calculate how much of your mortgage payment goes toward interest every month.
Each month, you pay less in interest and more toward your loan balance. If you have an adjustable-rate mortgage, your interest rate will change periodically. This means that your monthly payment may be higher or lower after your lender adjusts your interest rate.
Here is how much you’ll pay in interest for an average home in 4 New York cities:
| City | Average Home Value | Loan Term | Current Rate | Downpayment (20%) | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|---|---|
| New York City | $671,400 | 30-year fixed | 6.202% | $134,280 | $3,290.39 | $647,420.40 |
| Hempstead | $519,100 | 30-year fixed | 6.202% | $103,820 | $2,544.00 | $500,560.00 |
| Brookhaven | $352,900 | 30-year fixed | 6.469% | $70,580 | $1,778.70 | $358,012.00 |
| Islip | $414,600 | 30-year fixed | 6.469% | $82,920 | $2,089.69 | $420,608.40 |
Lender Credit Score Minimums in NY
Your credit score gives lenders a rough idea of your credit history. It’s a 3-digit number between 300 and 850. Several factors go into your credit score, including:
- Your payment history
- The age of your credit history
- How much of your available credit is used
- The number of recent credit inquiries you have
Here are the minimum credit scores for some New York lenders:
| Lender | Minimum Credit Score Required |
|---|---|
| BBVA | 620 |
| Citibank | 620 |
| Flagstar | 620 |
| loanDepot | 620 |
| Rocket Mortgage® | 620 |
- Online Mortgages
5 Best Mortgage Lenders in New York
To get the lowest rate, consider getting multiple quotes from New York’s best mortgage companies:
1. Best Overall: Rocket Mortgage®
Rocket Mortgage® offers a seamless digital mortgage experience.
Its award-winning customer service makes it an excellent fit for both experienced and first time homebuyers.
- Banking and Mortgages
You can upload and sign all of your documents online and instantly get in touch with a loan officer if you have questions.
2. Best for First Time Home Buyers: Chase
Chase has branch offices throughout New York, making it one of the best lenders for first time buyers.
You can sit down with a loan officer in person and get real-time answers to your questions.
It also offers competitive origination fees. Chase posts its interest rates on its website and has several mortgage calculators and other resources.
3. Best for Customer Service: United Mortgage Corp.
United Mortgage Corp. is a regional lender with expertise in the New York market. It offers a high level of customer service every step of the process.
Its loan officers will work with you to match you with the right mortgage product for your needs and budget. You’ll know what’s going on during every stage of the application process.
- Current Service Members
4. Best for Veterans: Veterans United
If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.
In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.
Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.
- Custom Options
5. Best for Lower Credit Scores: Freedom Mortgage
Freedom Mortgage offers VA, FHA and USDA mortgages, all of which have more flexibility when it comes to credit scores.
It also works with New York’s mortgage programs, which provide down payment assistance and low-interest rates.
- Self-employed Borrowers
6. CrossCountry Mortgage: Best for Self-Employed
CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.
It’s also easier to get approved if you’re self-employed. Tax returns are not required and you’ll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.
Getting a New York Mortgage
Some areas of New York have high home prices. If you’re a first time homebuyer looking for a New York home, consider the State of New York Mortgage Agency’s first time homebuyer programs. SONYMA offers 2 mortgage programs and a down payment assistance program. You may also want to look for local mortgage programs in the city or county where you plan to buy.
With high home prices, even a small interest rate differences can save you thousands. Get quotes from multiple lenders to ensure you get the best rate. Try to get all your quotes on the same day since mortgage rates change daily. Ask each lender for a quote for the same mortgage type so you can easily compare them. Look for fees and keep those in mind as you compare.
Frequently Asked Questions
Q: How do I get pre-approved?
First, you need to fill out an application and submit it to the lender of your choice. For the application you need 2 previous years of tax returns including your W-2’s, your pay stub for past month, 2 months worth of bank statements and the lender will run your credit report. Once the application is submitted and processed it takes anywhere from 2-7 days to be approved or denied. Check out our top lenders and lock in your rate today!
Q: How much interest will I pay?
Interest that you will pay is based on the interest rate that you received at the time of loan origination, how much you borrowed and the term of the loan. If you borrow $208,800 at 3.62% then over the course of a 30-year loan you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you are looking to refinance you can get started quickly here.
Q: How much should I save for a down payment?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you put down, the lower your monthly payment will be and ultimately you will save on interest costs as well. In the event that you are unable to save 20% there are several home buyer programs and assistance, especially for first time buyers. Check out the lenders that specialize in making the home buying experience a breeze.
