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Alabama Mortgage Rates

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Use SmartAsset's mortgage rate comparison tool to compare mortgage rates from the top lenders and find the one that best suits your needs.

Overview of Alabama Mortgages

In a state lineup, Alabama ranks nearly dead center in terms of population size. This southern state’s mortgage market follows suit, coming in right around average compared to historical national rates. For the most part, Alabama counties’ conforming loan limits and FHA loan limits also hover around average.

Today's Mortgage Rates in Alabama

Product Today Last Week Change
30 year fixed 3.29% 3.29% 0.00
15 year fixed 2.41% 2.38% +0.03
5/1 ARM 3.00% 3.00% 0.00
30 yr fixed mtg refi 3.15% 3.05% +0.11
15 yr fixed mtg refi 2.42% 2.25% +0.17
7/1 ARM refi 3.63% 3.63% 0.00
15 yr jumbo fixed mtg refi 2.50% 2.50% -0.00

National Mortgage Rates

Source: Freddie Mac Primary Mortgage Market Survey, SmartAsset Research
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Historical Mortgage Rates in Alabama

Photo Credit: ©iStock.com/Peeter Viisimaa

Alabama Mortgage Rates Quick Facts

  • Median Home Value: $154,000 (U.S. Census Bureau)
  • Loan Funding Rate: 51.76% (CFPB)
  • Homeownership Rate: 70.7% (St. Louis Fed)
  • Median Monthly Homeownership Costs: $1,186 (U.S. Census Bureau)

Alabama mortgage rates generally align closely with the national average. Homeownership costs in the state are also lower than the national median, which is $1,595.

A financial advisor in Alabama can help you plan for the homebuying process. Financial advisors can also help with investing and financial plans, including tax, retirement and estate planning, to make sure you are preparing for the future.

Alabama Historic Mortgage Rates*

YearAlabama RateU.S. Rate
20008.087.86
20016.936.94
20026.546.44
20035.755.67
20045.895.68
20055.985.85
20066.736.54
20076.546.42
20086.026.06
20094.935.05
20104.784.81
20114.514.56
20123.643.65
20133.893.84
20144.234.13
20153.963.88
20163.813.73
20174.194.03
20184.714.56

*The FHFA stopped reporting new data in 2018.

Alabama Mortgages Overview

Alabama is one of the more affordable states to purchase a home. The median home value here is $154,000, well under the corresponding national figure of $240,500.

Every county in the state has a standard conforming loan limit of $548,250. The data once again puts Alabama at an average, affordable level compared to the rest of the country. Every county also has the standard FHA limit of $356,362.

Conforming and FHA Loan Limits by County

CountyConforming LimitFHA Limit
Autauga$548,250$356,362
Baldwin$548,250$356,362
Barbour$548,250$356,362
Bibb$548,250$356,362
Blount$548,250$356,362
Bullock$548,250$356,362
Butler$548,250$356,362
Calhoun$548,250$356,362
Chambers$548,250$356,362
Cherokee$548,250$356,362
Chilton$548,250$356,362
Choctaw$548,250$356,362
Clarke$548,250$356,362
Clay$548,250$356,362
Cleburne$548,250$356,362
Coffee$548,250$356,362
Colbert$548,250$356,362
Conecuh$548,250$356,362
Coosa$548,250$356,362
Covington$548,250$356,362
Crenshaw$548,250$356,362
Cullman$548,250$356,362
Dale$548,250$356,362
Dallas$548,250$356,362
De Kalb$548,250$356,362
Elmore$548,250$356,362
Escambia$548,250$356,362
Etowah$548,250$356,362
Fayette$548,250$356,362
Franklin$548,250$356,362
Geneva$548,250$356,362
Greene$548,250$356,362
Hale$548,250$356,362
Henry$548,250$356,362
Houston$548,250$356,362
Jackson$548,250$356,362
Jefferson$548,250$356,362
Lamar$548,250$356,362
Lauderdale$548,250$356,362
Lawrence$548,250$356,362
Lee$548,250$356,362
Limestone$548,250$356,362
Lowndes$548,250$356,362
Macon$548,250$356,362
Madison$548,250$356,362
Marengo$548,250$356,362
Marion$548,250$356,362
Marshall$548,250$356,362
Mobile$548,250$356,362
Monroe$548,250$356,362
Montgomery$548,250$356,362
Morgan$548,250$356,362
Perry$548,250$356,362
Pickens$548,250$356,362
Pike$548,250$356,362
Randolph$548,250$356,362
Russell$548,250$356,362
St. Clair$548,250$356,362
Shelby$548,250$356,362
Sumter$548,250$356,362
Talladega$548,250$356,362
Tallapoosa$548,250$356,362
Tuscaloosa$548,250$356,362
Walker$548,250$356,362
Washington$548,250$356,362
Wilcox$548,250$356,362
Winston$548,250$356,362

It’s important to note that Alabama is a “caveat emptor," which is also known as a “buyer beware” state. That means responsibility falls heavily on the buyer to uncover any defects with the property prior to purchasing. Property inspections are an incredibly valuable tool to verify a property’s conditions before purchase. Home inspections are not mandatory, but they are absolutely critical to the integrity of a purchase. Following through on a sale without an inspection generally means a buyer is accepting the property as-is.

30-Year Fixed Mortgage Rates in Alabama

Fixed-rate mortgages tend to be the best mortgage option for buyers who plan to stay in their home for the long haul. As a result, 30-year fixed-rate mortgages are the most common type of home loan. Rates are reasonable and you’re guaranteed the same principal and interest payment over the life of the loan. Another option is a 15-year fixed-rate mortgage, a loan that generally comes with lower interest rates than the 30-year alternative. However, your monthly payments will be higher with this option.

The average 30-year fixed mortgage rate in Alabama is 2.70% (Zillow, Jan. 2021).

Alabama Jumbo Loan Rates

Homes in Alabama tend to be on the more affordable end. Because of that, there are fewer jumbo loan mortgages in Alabama. These type of loans exceed the $548,250 conforming loan limit that exists in every Alabama county. If you’re considering a jumbo loan for your mortgage, be aware that they come with higher interest rates.

Conforming loan limits exist because issuing a loan beyond that price is riskier for lenders. There is more money at stake, so the higher mortgage interest rate on jumbo loans is meant to compensate for the added risk.

The average rate for a 30-year fixed jumbo mortgage in Alabama is 2.65% (Zillow, Jan. 2021).

Alabama ARM Loan Rates

An ARM is an adjustable-rate mortgage that typically offers a lower interest rate upfront than a fixed-rate mortgage. The lower rate is available for an initial, introductory period that may last for 1, 3, 5, 7 or 10 years, depending on the terms of the loan. After that initial period, the mortgage interest rate can “adjust” once a year. Generally, the rate increases.

The good news is that there’s an interest rate cap specified in the loan’s terms, which protects you from that scenario. So you will know upfront what the highest possible rate could be.

However, the loan rate may still adjust to a level that you can’t afford. Before deciding on an ARM, it’s best to assess the potential maximum interest rate listed in the terms to see if it’s something you would be comfortable paying.

The average rate for an 5/1 ARM in Alabama is 3.01% (Zillow, Jan. 2021).

Alabama Mortgage Resources

If you need help with your Alabama mortgage, there are resources available for you. The Alabama Housing Finance Agency (AHFA) offers two programs to help you get started. The Step Up program was designed to help mid-range homebuyers who can afford a mortgage, but need more assistance with their down payment. The funds for the down payment are secured with a second mortgage and combined with a standard 30-year fixed-rate mortgage.

The AHFA also offers a Mortgage Credit Certificate, which reduces homebuyers’ federal income tax to free up income for a mortgage qualification.

If you’re struggling with your mortgage and are concerned you might go into foreclosure, the Hardest Hit Alabama program can help. Eligible homeowners can receive unemployed or underemployed mortgage help, loan modification and lien extinguishment.

Available Resources

ResourceProblem or IssueWho Qualifies
Alabama Housing Finance AuthorityOffers down payment assistance, affordable loans and a mortgage credit certificate.First or repeat homebuyers who are eligible.
Hardest Hit AlabamaForeclosure protection.At-risk homeowners who need help keeping their homes.
USDA Rural Development - Single family loansOffers low-interest loans to buy, build, repair, or own safe and affordable homes in rural America.Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.

In Alabama, you may also qualify for assistance from the United States Department of Agriculture Rural Development. The program is intended to help rural communities by offering aid in securing safe, affordable housing. Loans and grants are available for people looking to purchase a new home or repair their current home.

Alabama Mortgage Taxes

Homeowners are allowed to deduct the mortgage interest they pay when they file their federal income taxes. This applies for Alabama state income taxes as well. You can double your deductions for the qualifying mortgage interest payments you have made in the tax year by including it on both state and federal filings.

Alabama also charges taxes on real estate property title transfers. The state real estate transfer tax for Alabama is $0.50 per $500 of transferred value. In Alabama, the buyer typically pays this tax. You’ll want to discuss this tax with your lawyer or accountant before buying.

Alabama Mortgage Refinance

While the Home Affordable Refinance Program (HARP) no longer exists, there is an alternative: the High Loan-to-Value Refinance Option from Fannie Mae.

Best Places To Get A Mortgage

SmartAsset’s interactive map highlights the best counties in the U.S. (and in each state) for securing a home mortgage. Hover over states and counties to see rankings and data points for each region, or use the map’s tabs to view the top counties for each of the factors included in our analysis.

Worst
Better
Rank County Loan Funding Rate 5 Year Borrowing Costs Property Tax Annual Mortgage Payment

Methodology In order to determine the best places in the country to get a mortgage, our study compared four factors, including overall borrowing costs, likelihood of securing a mortgage, property taxes and annual mortgage payments.

To calculate the overall borrowing costs, we analyzed the expected costs throughout the first five years for a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to mortgage originations (secured mortgages) in each county. Annual mortgage payments are a measure of the annual principal and interest payments for a $200,000 loan in that location using average mortgage rates in each county.

Finally, we ranked locations based on these four factors, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.

Sources: Mortgage Bankers Association, US Census Bureau 2018 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset