Overview of Indiana Mortgages
The Hoosier State is a mid-range state in terms of population, but its mortgage rates tend to be on the high end compared to the rest of the country. Indiana’s county conforming loan limits and FHA loan limits hover around average, with the exception of some higher FHA limits throughout the state.
|30 year fixed||3.22%||3.22%||0.00|
|15 year fixed||2.75%||2.71%||+0.04|
|30 yr fixed mtg refi||3.28%||3.22%||+0.06|
|15 yr fixed mtg refi||2.85%||2.88%||-0.03|
|7/1 ARM refi||3.63%||3.63%||0.00|
|15 yr jumbo fixed mtg refi||3.06%||3.63%||-0.56|
National Mortgage Rates
Historical Mortgage Rates in Indiana
Indiana Mortgage Rates Quick Facts
- Median Home Value: $156,000 (U.S. Census Bureau)
- Loan Funding Rate: 57.1% (CFPB)
- Homeownership Rate: 69.5% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,148 (U.S. Census Bureau)
Indiana mortgage rates are generally higher than the national average. On the bright side, the state's median monthly homeownership costs are quite a bit lower than the national median, which is $1,595.
A financial advisor in Indiana 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.
Indiana Historic Mortgage Rates*
|Year||Indiana Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
Indiana Mortgages Overview
Indiana real estate is more affordable than other parts of the nation. For instance, the median home value in Indiana is $156,000, while the the U.S. median is nearly $85,000 higher at $240,500.
Every county in the state has a standard conforming loan limit of $548,250, and most have the standard FHA limit of $356,362. The FHA limit is higher in 15 counties, though, including Boone, Brown, Hamilton, Hancock, Hendricks, Jasper, Johnson, Lake, Madison, Marion, Morgan, Newton, Porter, Putnam and Shelby.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
Indiana is not a “buyer beware” state (also known as caveat emptor). Home sellers here have to fill out a form disclosing their knowledge of any issues with the house to the buyer. But according to the fine print, those disclosure forms are not meant to replace a home inspection or act as any sort of contract between the buyer and seller. That means you’re still going to want a home inspection. A quality home inspection will help you attend your closing with confidence, knowing you’re not about to move into a major money pit.
30-Year Fixed Mortgage Rates in Indiana
A 30-year fixed-rate mortgage is the most popular type of home loan. This is a reliable option that tends to be the best mortgage solution for buyers who are looking to stay in their house for a long time. With fixed-rate mortgages, the interest rate remains the same for the duration of the loan, unless you decide to refinance. That means you can depend on your monthly mortgage payment remaining the same for the duration of the loan (excluding property tax and insurance).
The average Indiana mortgage rate for a fixed 30-year loan is 2.78% (Zillow, Jan. 2021).
Indiana Jumbo Loan Rates
Conforming loan limits throughout Indiana stick to the standard $548,250 level, as most homes in the state fit within that range. If you take out a loan that exceeds this limit, it is considered a jumbo loan and is accompanied by a higher interest rate. Remember that it is riskier for banks to lend these nonstandard loans and higher rates are how they offset that risk. The high interest rates that accompany jumbo loans may be a good reason to decide on a home that fits comfortably within your budget.
The average 30-year fixed jumbo loan rate in Indiana is 2.68% (Zillow, Jan. 2021).
Indiana ARM Loan Rates
An adjustable-rate mortgage (ARM) stands in direct contrast to a fixed-rate mortgage. Unlike with a fixed-rate mortgage, an ARM’s interest rate level can change over the duration of the loan. An ARM may seem attractive because it offers a lower interest rate upfront which is available for a specific period lasting for one, three, five, seven or 10 years. However, when that period comes to an end, the rate can change and will likely go up. If you feel sure that you will no longer be living in the house when the introductory period ends, an ARM might be a good option for you.
While the interest rate on an ARM can change over time, it must follow specific rules concerning how many times it can change and by how much, which are laid out in the loan’s terms. If you decide on an ARM, it is a good idea to check the maximum possible interest rate and see if it’s something that you can afford to pay.
The average rate for a 5/1 ARM in Indiana is 3.18% (Zillow, Jan. 2021).
Indiana Mortgage Resources
For Hoosier homebuyers, there are resources available to help you in your mortgage process.
The Indiana Housing and Community Development Authority is a resource available to homebuyers and homeowners. Some of the programs they offer include:
- Helping to Own (H2O) – Offers down payment grants and 100% financing for qualifying first-time homebuyers only, unless you’re buying in a targeted area.
- Mortgage credit certificate (MCC) - Federal tax benefits are available for qualifying first-time homebuyers only, unless you’re purchasing in a targeted area.
- Next Home (NH) – This program offers down payment assistance and is not restricted to first-time homebuyers.
- Next Home with Mortgage Credit Certificate (NH/MCC) - Down payment assistance and tax benefits for first-time homebuyers only, unless you’re buying in a targeted area.
- Affordable Home (AH) - FHA loans available for qualifying first-time homebuyers only, unless the home is located in a targeted area.
- My Home (MH) - Affordable loan options available for all eligible homebuyers.
- My Home with Mortgage Credit Certificate (MH/MCC) - Affordable loans with federal tax benefit for first-time homebuyers only, unless you are purchasing a home in a targeted area.
If you’re a first-time homebuyer in Gary, the First Time Homebuyer Down Payment Assistance Program by the Homeownership Opportunity Network offers a variety of benefits. It offers funding via forgivable loans for down payments and closing costs, among other home purchasing fees, for eligible homeowners.
|Resource||Problem or Issue||Who Qualifies|
|Indiana Housing and Community Development Authority||Mortgage and down payment assistance for first-time homebuyers, repeat homebuyers and homebuyers in designated areas of the state.||Requirements vary by program; location and income eligiblity.|
|First Time Homebuyer Down Payment Assistance Program||Down payments on first home.||Must be a first-time homebuyer; minimum credit score 660.|
|Mortgage Credit Certificate||Tax breaks on mortgage.||First-time homebuyers who meet income requirements.|
|USDA Rural Development - Single family loans||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.|
The United States Department of Agriculture Rural Development offers nationwide programs in rural communities that help residents obtain safe, affordable housing. Indiana is eligible as well. Loans and grants are available for people looking to purchase a new home or repair their current home. Check at the start of your home search to see if you qualify for the USDA rural development offers.
Indiana Mortgage Taxes
Indiana is one of just a handful of states that collects a personal income tax, but does not offer a deduction on mortgage interest. That doesn’t mean you’re out of luck if you’re buying in Indiana, though. If you’re a first-time homebuyer, you can still apply for the Mortgage Credit Certificate Program to get a break on your mortgage interest. It is a credit that lowers what you owe on your tax bill.
Another bonus: Unlike most states, Indiana does not charge taxes on real estate property title transfers.
Indiana Mortgage Refinance
The Home Affordable Refinance Program (HARP) no longer serves as an option for refinancing, as it ceased to exist at the end of 2018. It may be worth looking into an alternative: the High Loan-to-Value Refinance Option from Fannie Mae.
If you don’t qualify for these options, you can still shop around and compare different lenders to find a plan that you are comfortable with.
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