Overview of Alaska Mortgages
Alaska is the largest state in the U.S. in terms of square mileage, but it has a population below one million, making it the most sparsely populated state. If you’re thinking of buying a home here, the good news is that mortgage rates in Alaska are around the national average. However, home values are higher than the U.S. average. Alaskan counties’ conforming loan limits are all at the highest minimum and FHA loan limits are higher in almost two-thirds of the state’s counties.
|30 year fixed||2.98%||2.98%||0.00|
|15 year fixed||2.25%||2.25%||0.00|
|30 yr fixed mtg refi||2.95%||2.95%||0.00|
|15 yr fixed mtg refi||2.19%||2.19%||0.00|
|7/1 ARM refi||2.38%||2.25%||+0.13|
|15 yr jumbo fixed mtg refi||4.06%||4.06%||0.00|
National Mortgage Rates
Historical Mortgage Rates in Alaska
Alaska Mortgage Rates Quick Facts
- Median Home Value: $281,200 (U.S. Census Bureau)
- Loan Funding Rate: 49.99% (CFPB)
- Homeownership Rate: 62.6% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,933 (U.S. Census Bureau)
For the past decade, Alaska mortgage rates have been equal to or slightly below the national average.
A financial advisor in Alaska 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.
Alaska Historic Mortgage Rates*
|Year||Alaska Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
Alaska Mortgages Overview
Alaskan real estate is more expensive than average. In Alaska, the median home value is $281,200, which is higher than the national median home value of $240,500, according to the U.S. Census Bureau.
The conforming loan limit for every county in the state is $822,375, which is higher than the standard $548,250. This is a reflection of the higher real estate prices in Alaska.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
|Fairbanks North Star||$822,375||$356,362|
|Hoonah-Angoon Census Area||$822,375||$356,362|
|Kusilvak Census Area||$822,375||$356,362|
|Lake And Peninsula||$822,375||$356,362|
|Petersburg Census Area||$822,375||$356,362|
|Prince Of Wales-Outer Ketchikan||$822,375||$356,362|
It’s important to note that Alaska is a deed of trust state, meaning when you take out a mortgage in Alaska you’ll likely get this type of loan document in place of a mortgage document. Lenders who issue mortgages have to go to court to foreclose on the home that the mortgage applies to. If a trust deed is offered instead, the time and expense of going to court can be avoided. The lender can initiate a “power of sale” foreclosure by hiring a third party to auction the home it wants to foreclose.
Some states are "recourse" states, meaning that if you go into foreclosure, a lender is allowed to go after your assets for any difference between your home’s value and the amount owed on your mortgage. However, Alaska is a non-recourse state, meaning you generally would not be liable for that difference in a foreclosure.
Alaska also has disclosure laws to protect buyers when they’re closing on a house. Alaska Statute (AS) 34.70.050 establishes that if a potential buyer makes a written offer on a residential property, then the seller must deliver a written disclosure statement to the buyer. Even so, it’s always smart to opt for a home inspection before closing on a house.
30-Year Fixed Mortgage Rates in Alaska
The most common type of home loan in the U.S. is a 30-year fixed-rate mortgage. This mortgage usually makes the most sense for buyers who plan to stay in their house for a long time, as the interest rate remains the same for the duration of the loan. It’s also easier to budget for this type of loan as your monthly mortgage payments stay the same. Alaska buyers can also consider a 15-year fixed rate mortgage with a lower interest rate, but the flip side of that is that monthly payments are higher.
The average Alaska mortgage rate for fixed-rate 30-year mortgages is 2.84% (Zillow, Jan. 2021).
Alaska Jumbo Loan Rates
Homes in Alaska are more expensive than the average U.S. home. As a result, you will find that every Alaskan county has a conforming loan limit of $822,375 – considerably higher than the standard $548,250 found in most of the country. Jumbo loans are those that exceed conforming limits and therefore are accompanied by higher interest rates. Issuing loans above conforming limits presents a bigger risk for lenders, so the higher interest on jumbo loans combats that risk.
The average 30-year fixed jumbo loan rate in Alaska is 2.96% (Zillow, Jan. 2021).
Alaska ARM Loan Rates
An adjustable-rate mortgage (ARM) usually offers a lower interest rate upfront than a fixed-rate mortgage. The lower rate is available for an initial period somewhere between one and 10 years, depending on the terms of the loan. After that time frame, the rate will typically rise but is capped at a certain level specified in the terms of the loan. Before signing on to an ARM to purchase a home in Alaska, remember to ensure that the highest possible interest rate is one that you can afford to pay.
The average rate for a 5/1 ARM in Alaska is 3.00% (Zillow, Jan. 2021).
Alaska Mortgage Resources
Whether you’re a first-time homebuyer looking for down payment assistance or a senior citizen looking to secure a new place in the Land of the Midnight Sun, there are resources available for you.
The Alaska Housing Finance Corporation offers down payment assistance in the form of education. Its HomeChoice course is free and available to all homebuyers, and it covers the steps and preparations that come with buying a house.
The Cook Inlet Housing Authority has programs available to help eligible buyers find affordable housing or receive down payment assistance. The Cook Inlet Lending Center CILC offers personal finance forums, individual development accounts and first and second mortgage loans that reduce or eliminate mortgage insurance premiums.
Fairbanks Neighborhood Housing Services’ Homeownership Center can be a valuable resource for any stage of the homebuying process. It offers workshops for credit preparation, down payment and closing assistance and loans for maintenance or weatherization projects.
|Resource||Problem or Issue||Who Qualifies|
|Alaska Housing Finance Corporation||Securing a loan or refinancing.||First-time homebuyers, purchasers in rural areas, or refinancers with or without AHFC loans.|
|Alaska Housing Finance Corporation - HomeChoice||Education for homebuyers.||Available to all home buyers - cuts down on closing costs if purchaser takes a course.|
|Cook Inlet Housing Authority||HUD Section 184 and down payment assistance.||Must meet eligbility requirements for down payment assistance and property eligibility varies depending on income.|
|Fairbanks Neighborhood Housing Services||Down payment assistance, renovation loans and general education.||Anyone in the homebuying process.|
|USDA Rural Development Housing||Offers payment assistance to increase an applicant’s repayment ability.||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 and not be suspended or debarred from participation in federal programs.|
In Alaska, 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.
Alaska Mortgage Taxes
Homeowners can deduct the mortgage interest they pay when they file their federal income taxes. In some states, owners can double their deductions by including mortgage interest paid on their state income taxes as well. But as Alaska is one of seven states that does not levy an income tax, that system does not apply here.
In Alaska, there is also no tax charged on real estate property title transfers.
Alaska Mortgage Refinance
Refinancing in Alaska? There are a couple resources available to you. The Home Affordable Refinance Program (HARP) is no longer available, but Fannie Mae currently offers its own alternative, providing qualifying applicants access to interest and principal payment reductions as well as low closing costs.
You can seek refinancing help from the Alaska Housing Finance Corporation, whether you’re an AHFC borrower or not.
Even if you don’t quality for one of these programs, you can work with the lender who issued your original mortgage or other lenders to find a refinance solution that works for you.
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.
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