Overview of Iowa Mortgages
If you decide to become a Hawkeye homeowner, know that mortgage rates have historically been higher than the national average. That means Iowa monthly mortgage payments are a bit pricier than those in the rest of the country. Iowa counties’ conforming loan limits are fully standard, as every county is in line with the national limit.
| Product | Today | Last Week | Change |
|---|---|---|---|
| 30 year fixed | 6.25% | 6.25% | 0.00 |
| 15 year fixed | 5.25% | 5.25% | 0.00 |
| 5/1 ARM | 4.63% | 2.25% | +2.38 |
| 30 yr fixed mtg refi | 6.38% | 6.38% | 0.00 |
| 15 yr fixed mtg refi | 5.50% | 5.50% | 0.00 |
| 7/1 ARM refi | 5.25% | 5.13% | +0.13 |
| 15 yr jumbo fixed mtg refi | 3.08% | 3.12% | -0.03 |
National Mortgage Rates
| Lender | APR | Payment |
| Searching for Mortgages...  |
Historical Mortgage Rates in Iowa
Iowa Mortgage Rates Quick Facts
- Median Home Value: $174,400 (U.S. Census Bureau)
- Loan Funding Rate: 63.51% (CFPB)
- Homeownership Rate: 72.1% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,348 (U.S. Census Bureau)
For the past decade or so, Iowa mortgage rates have been coming in slightly above the national average.
A financial advisor in Iowa 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.
*The FHFA stopped reporting new data in 2018.
Iowa Mortgages Overview
Midwestern real estate is often more affordable than coastal homes, and that’s the case in Iowa too. The median home value sits at $174,400, which is well below the nation’s median of $281,400. Property values vary throughout the state.
Every county in the state has a standard conforming loan limit of $726,200 and FHA loan limit of $472,030, putting Iowa once again at an average rate in line with the rest of the country.
Iowa has required real estate disclosures, meaning the seller must disclose that basement flood or leaky roof. But regardless of the laws, it’s still best to opt for a home inspection before officially closing on your home. This will protect buyers from uncovering massive pitfalls after they’ve purchased the property.
Additionally, Iowa is one of a dozen or so states in the country that is non-recourse, which is good news for a worst-case scenario. If you buy a house in Iowa and it later goes into foreclosure, your house could be worth less than what you owe on your mortgage. In a recourse state, the lender could go after your assets to make up for that deficiency. But in a non-recourse state, you typically won’t be held liable to make up that difference.
30-Year Fixed Mortgage Rates in Iowa
Weighing your mortgage options in the Hawkeye State? You’ll probably want to consider a fixed-rate mortgage if you are planning on staying in your home for the long haul. A 30-year fixed-rate mortgage is the most common type of home loan. With this mortgage you have a long time to pay back the loan (30 years) and your interest rate will remain steady throughout that time, unless you refinance. You also have the option of obtaining a 15-year fixed-rate mortgage which comes with a lower interest rate, but the monthly payments for that will be higher.
The average Iowa mortgage rate for a fixed 30-year mortgage is 6.41% (Zillow, Feb. 2023).
Iowa Jumbo Loan Rates
If you need to take out a loan that exceeds that limit, it’s considered a jumbo loan and it will normally be accompanied by a higher interest rate. However, the average jumbo loan rate in Iowa is less than the rate for a normal loan. Iowa homes are less expensive than the average American home, so the jumbo loan limit holds steady at $726,200 in every Iowa county.
The average 30-year fixed jumbo loan rate in Iowa is 5.90% (Zillow, Feb. 2023).
Iowa ARM Loan Rates
An adjustable-rate mortgage (ARM) could be a good option if you are looking to flip the house you buy or if it’s a starter home that you think you will move out of pretty quickly. The main attraction of an ARM is that it offers a lower initial interest rate for a fixed period of time between one and 10 years, depending on the loan’s terms. When that period ends, the rate can change and usually will go up. However, how often it goes up as well as a cap on how high it can get is laid out in the terms. Since you know from the get-go what the highest possible rate is, it is a smart idea to check that it’s something that you can afford if your plans were to suddenly change.
The average rate for a 5/1 ARM in Iowa is 5.18% (Zillow, Feb. 2023).
Iowa Mortgage Resources
If you need assistance buying a home in Iowa, here are some of the options that can help you at any step of the process.
The Iowa Finance Authority has a couple different options for homebuyers, both of which offer 30-year fixed-rate mortgages. First-time homebuyers can look into the FirstHome program, and first and repeat buyers can apply for the Homes for Iowans Program, which helps potential buyers afford a home in Iowa. There are “plus” versions of both of those programs as well, and that adds in a $2,500 grant for a down payment or closing costs.
The Neighborhood Finance Corporation also has several loan and grant opportunities for homeowners in certain lending areas. The NFC offers up to $10,000 in forgivable home improvement funds, up to $2,500 in closing cost assistance, no private mortgage insurance and a competitive fixed interest rate.
The United States Department of Agriculture Rural Development program also offers loan help and mortgage grants throughout the country. The program aims to help develop more rural areas of a state while offering safe, affordable housing for residents. Iowa has grants and loans available for home repairs as well as loan assistance programs for those who qualify.
Iowa Mortgage Taxes
Homeowners are allowed to deduct the mortgage interest they pay when they file their federal income taxes and this deduction applies for Iowa 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.
Also keep in mind that Iowa charges taxes on real estate property title transfers. The real estate transfer tax for Iowa is $1.60 per $1,000, with the first $500 being exempt. In Iowa transactions, the seller typically pays this fee.
Iowa Mortgage Refinance
Refinancing can help cut thousands of dollars off your overall mortgage. Iowans hoping to refinance have options. The Neighborhood Finance Corporation also offers a refinance program in its NFC lending areas. You also always have the option of returning to the lender who issued your current mortgage and comparing the rates with other lenders, in order to land on a new plan that is the best fit for your current situation.
