Your Mortgage Rate May Be Lower Than You Think—Depending on Where You Live

The possibility of buying a home hinges on many factors, but for many, locking in a low mortgage rate is key. For the week ending Sept. 26, the national 30-year fixed mortgage rate rose to 6.3%, but depending on what state you live in—you may actually be able to settle on a lower number.

"Local economic factors, demand and supply of housing, average loan size, and competition between lenders are some of the biggest reasons rates offered could be different in different states," says Brian Shahwan, vice president, mortgage banker and broker with William Raveis Mortgage, part of the Melissa Cohn Group.

While those factors are out of your control, there's at least one important metric that you can manage yourself. Your credit score will play an important role when shopping around to get the lowest rate.

"Mortgage rates can often be determined by examining the full financial profile of the borrower and the specific property they are purchasing," Shahwan told Realtor.com®, explaining that while lenders may operate in different regions, all will take into account a credit score, loan size, and regulations.

"High competition, this will drive rates lower," Jessica Vance, a San Diego mortgage broker, told Realtor.com. "In states with strong housing demand, lenders profit on volume, therefore having lower rates."

Vance shared an insider tip: "I would note that the overhead of a business may be much less expensive in other states, therefore passing on that savings to their borrowers by way of lower rates."

You and your state

In the second quarter of 2025, WalletHub research found the top five states with the lowest mortgage rates are: Idaho (4.35%), Hawaii (4.48%), Utah (4.54%), California and Arizona (tied at 4.56%).

Alabama, with an average second quarter mortgage rate of 4.82%, saw the largest mortgage rate decrease from the first quarter to the second.

"Some states may appear to have lower rates, but it is also possible that these areas have savvy consumers with higher credit scores," Sarah DeFlorio, vice president, mortgage banking at William Raveis. "Mortgage rates can also be impacted by competition, so that same cohort of consumers may be more likely to shop around and look for a better option rather than just accepting what is offered upfront."

Carl Holman with Foundation Mortgage Corporation explains that mortgage rates can look different from state to state because lenders factor in regional risks and market conditions.

"Things like property values, foreclosure rates, and even how competitive the local lending market is can nudge rates up or down. It’s less about the borrower and more about the bigger picture in that state’s housing and economic environment," Holman told Realtor.com.

WalletHub identified only six states with second quarter mortgage rates above the national rate of 6.3%: Kansas (6.35%), New Hampshire (6.37%), Texas (6.44%), Connecticut (6.48%), Nebraska (6.50%), and New Jersey (6.85%).

But no two rates in a state may look the same based on the factors of the borrower. Again, lenders will take a look at the full financial profile and the property a borrower is interested in buying.

"On the borrower side, things like FICO, debt-to-income ratio, loan-to-value, how income is earned, and whether the property will be a primary, secondary, or investment property are all important factors," explains Shahwan. "On the property side, type of property and location can impact eligible rates. Ultimately banks are evaluating risk when determining which rate a borrower might qualify for."

The key takeaway—shop around

A traditional 30-year fixed-rate mortgage guarantees a borrower locks in the rate at the start of the loan, but for some homebuyers, this may not be the best option.

DeFlorio has found that most borrowers do not keep the mortgage for the full loan term, so oftentimes an adjustable-rate mortgage can be an advantageous play to get a lower rate.

"Someone who is very risk-averse would not feel comfortable with this product, but when you are looking at a 7- or 10-year adjustable, that gives you plenty of time before you have to think about doing a refinance," says DeFlorio. "As rates drop significantly, the likelihood is that you will want to do a refi, so you may as well take advantage of the best rate offerings now, knowing that is the case."

Whatever rate a borrower decides on, becoming a homeowner comes with added financial responsibilities. It's important to set aside money for the unexpected.

"Make sure you budget for a rainy-day fund, as there are almost always unexpected costs to owning a home, and you want to be prepared to handle them," advises DeFlorio.