Overview of Montana Mortgages
Montana draws millions of visitors each year to sites like Glacier National Park and Big Sky Resort. The lucky residents and homeowners of this state have access to these parks year-round. In terms of recent mortgage rates for interested homebuyers, Montana is usually at or above national averages. Montana counties’ conforming loan limits hold steady at average, but there’s a bit more variation in the FHA loan limits.
|30 year fixed||3.02%||3.00%||+0.02|
|15 year fixed||2.27%||2.25%||+0.02|
|30 yr fixed mtg refi||3.01%||2.99%||+0.03|
|15 yr fixed mtg refi||2.23%||2.20%||+0.02|
|7/1 ARM refi||2.50%||2.50%||0.00|
|15 yr jumbo fixed mtg refi||2.44%||2.44%||0.00|
National Mortgage Rates
Historical Mortgage Rates in Montana
Montana Mortgage Rates Quick Facts
- Median Home Value: $253,600 (U.S. Census Bureau)
- Loan Funding Rate: 56.95% (CFPB)
- Homeownership Rate: 68.7% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,429 (U.S. Census Bureau)
Montana is home to Glacier National Park, the Rocky Mountains and Going-to-the-Sun road. Known as Big Sky Country, Montana is the ideal settling spot for ranchers, adventurers and anyone looking to get a little closer to nature. It is one of the largest states in the country, but it’s also one of the least densely populated. Montana has room to roam, if you’re looking for wide open spaces.
Homebuyers will find that Montana mortgage rates are generally just a little above the national average, or, if not, very close to the same. So far, current Montana mortgage rates are staying just below the U.S. average.
A financial advisor in Montana 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.
Montana Historic Mortgage Rates*
|Year||Montana Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
Montana Mortgages Overview
Montana real estate is average or just slightly more affordable when compared to other parts of the nation.
Every county in Montana has a standard conforming loan limit of $548,250, and most have a typical FHA limit of $356,362. The FHA limit does increase in some countries, including Flathead, Gallatin, Missoula, Park and Richland. Those counties’ FHA limits vary from $356,500 to $478,400. Those numbers mean that Montana is at an average level for its home prices compared to the rest of the country.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
|Lewis and Clark||$548,250||$356,362|
Montana is what is known as a non-recourse state. This means that if your home were to go into foreclosure and is worth less than the amount still owed on your mortgage, your lender is not allowed to come after your assets for the difference in those amounts.
Montana also lacks disclosure laws for sellers – it is known as a “caveat emptor,” or “buyer beware,” state. Typically, home sellers have to fill out a form disclosing their knowledge of any issues with the house to the buyer. Because those laws are more lax in Montana, a home inspection is absolutely critical to the integrity of the sale. A quality home inspection will help you attend your closing with ease, knowing you’re not about to move into a major money pit. A note for sellers: Even if you’re not required to disclose defects about the house, many realtors require some kind of disclosure, and it may be better in the long run to be forthcoming about the condition of your property.
30-Year Fixed Mortgage Rates in Montana
Are you looking to become a homeowner in the Treasure State? The first home loan to consider is a 30-year fixed-rate mortgage. If you intend to stay in your new home for the long run, a 30-year fixed-rate mortgage will probably be the best option for you. The interest rate on this type of mortgage remains the same for the entirety of the loan. This allows you to budget more easily for your monthly mortgage payments. You will have three decades to pay off the mortgage, unless you’ve made pre-payments or you decide to refinance.
The average Montana rate for a fixed 30-year mortgage is 2.78% (Zillow, Jan. 2021).
Montana Jumbo Loan Rates
Conforming loan limits stick to the average $548,250 level in every Montana county, because most homes in the state fit within that range. Because of that, there are fewer jumbo loan mortgages in the state. A jumbo loan is one that exceeds the conforming loan amount in a certain area. So for anywhere in Montana, that would be a home loan that’s larger than $548,250. It’s worth noting that jumbo loans have higher interest rates, so you may prefer to go with a home that fits more comfortably within your budget. However, jumbo loan rates are currently lower than fixed rates in Montana.
The average 30-year fixed jumbo loan rate in Montana is 2.62% (Zillow, Jan. 2021).
Montana ARM Loan Rates
Another home loan that you should be aware of is an adjustable-rate mortgage (ARM). This loan typically comes with a lower initial interest rate than a fixed-rate mortgage. That introductory rate is offered for a period between one and 10 years. At the end of that time, the interest rate may go up or down once a year and it will likely increase.
The most important thing to keep in mind when deciding if an ARM is the right choice for you is that the loan’s terms will specify how many times the rate can change and also will put a cap on how high it can reach. It is important to carefully assess the highest possible interest rate listed in the terms to determine if it’s one that you can afford. Interestingly, ARM rates are higher than both jumbo and fixed rates.
The average rate for an ARM in Montana is 3.04% (Zillow, Jan. 2021).
Montana Mortgage Resources
For homebuyers looking for their own piece of Big Sky Country, there are resources out there to help you in your mortgage process.
The Montana Board of Housing is a comprehensive resource for homebuyers looking for assistance. Some of the programs they offer include:
- Down Payment Assistance - The Montana Board of Housing partners with cities, counties, lenders, non-profits and others to help eligible homebuyers afford homeownership. Applicants can receive anywhere from $1,500 to $65,000 depending on location, need and program limits.
- 80% Combined Program - This program provides qualified homebuyers with FHA loan alternatives if they are not eligible for RD-guaranteed loans. This program allows MBOH to provide loans at 80% or less loan-to-value to eliminate mortgage insurance.
- Homebuyer education and counseling - Montana Homeownership Network members offer homebuying courses. Topics covered include budgeting and credit, financing a home, selecting a home, assessing homebuying readiness and maintaining a home and finances.
NeighborWorks Montana offers down payment and closing cost assistance for eligible applicants. Loans are available for families and individuals whose income is at or below 80% of the county’s median income. Loans are provided at no interest for 15 years or until the borrower leaves or refinances the home.
|Resource||Problem or Issue||Who Qualifies|
|Montana Board of Housing||Offers home education programs, down payment assistance and mortgage insurance elimination.||Variety of programs are suitable for most homebuyers who need housing assistance.|
|Neighborworks Montana||Home loans for low-income households||Several different types of home loans are available to households that meet income requirements ranging from 80% to 125% of the area’s adjusted median income.|
|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; Not be suspended or debarred from participation in federal programs.|
The United States Department of Agriculture Rural Development offers a program to help residents in rural Montana areas secure affordable housing. Check at the start of your home search to see if you qualify for the USDA rural development offers. The program offers loans and grants for people in the market for a home, as well as those who need to repair their current abode.
Montana Mortgage Taxes
Montana does not charge a transfer tax on real estate, so you won’t need to worry about that extra cost as a buyer or seller.
Homeowners who itemize deductions when filing their federal taxes can deduct the mortgage interest they pay throughout the year from their taxable income. Since Montana follows federal itemized deductions rules closely, you can also take the mortgage interest deduction on your Montana income taxes.
Montana Mortgage Refinance
Many homebuyers decide to refinance their original home loans for a lower rate or a longer payback period. If that’s something you’re interested in, you'll have plenty of lenders to choose from. Remember, you are under no obligation to work with the lender who issued your original loan. You’re free to look around and compare rates and terms from other lenders.
The Home Affordable Refinance Program (HARP), which used to help homeowners refinance, has now officially expired. To fill the void that this has created, Fannie Mae's High Loan-to-Value Refinance Option is available 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