Best Mortgage Rates in Indiana

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Contributor, Benzinga
October 21, 2021
Loan TypeRateAPR
30-year fixed 6.749% 6.77%
15-year fixed 5.812% 6.101%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) N/A N/A
Rates based on an average home price of $173,277 and a down payment of 20%.
See more mortgage rates on Zillow

It’s a great time to buy a home in Indiana. Low-interest rates and plenty of houses for sale means you could walk away with a great deal. Benzinga’s guide will help ensure you’re getting the best mortgage interest rate for you, whether you’re purchasing a new home in the Hoosier state or requesting a refinance quote.

Best Mortgage Lenders in Indiana

The best mortgage companies provide great customer service and accommodate the loan types that work for you. Here are a few of the top lenders in Indiana to help you with your search.

What is a Mortgage Rate?

When a business lets you borrow money, that business will probably want you to pay interest for it. The term “mortgage rate” refers to the amount of interest a lender charges you to borrow the money you need to purchase a new home. Interest rates are set by each financial institution but typically fall within the same range since lenders want to remain competitive and still make a profit.

What Factors Impact Your Mortgage Rate?

The interest rate you’re quoted when you apply for a mortgage probably won’t be the same as the next person who applies. There are a variety of factors that impact the lender’s general rate and is adjusted based on your unique situation.

  • The economy: Interest rates are set by individual lenders, but they’re based on the overall health of the economy. If the unemployment rate is low and consumer spending is high, lenders can afford to up their rates a little.
  • The bond market: Mortgages usually end up being repackaged into investment products called mortgage-backed securities. Lenders want to make sure the yields they’ll receive on their mortgages will be enough to make the loan worth it. For that reason, they’ll look at the bond market, calculate the average yield and charge an interest rate that will help them make a profit.
  • Location of the home: The housing market in the area you’re buying also affects interest rates. If you’re in a county in Indiana where the housing market is strong, you may see rates a little higher.
  • Type of residence: If you’re buying a home to serve as your primary residence, you’ll get a better interest rate than someone buying a 2nd or 3rd home. 
  • Your credit score: Lenders take a close look at your credit score before they approve you for a loan. You may see higher rates if your score is on the low end of the preferred range.
  • Your debt-to-income ratio: Your mortgage lender will scrutinize your finances during the time period you’re buying a home. The amount of money your household brings in every month is an important factor. Just as important is the amount of debt you have. Lenders look for a low debt-to-income ratio from borrowers, which means your debt is a low percentage of your income.
  • The type of loan: There are multiple types of loans, and interest rates vary from one to another. Conventional loans are usually higher than FHA and VA loans, which are both backed by the federal government. Lenders for first time buyers might steer you toward an FHA loan. The reduced risk means you may be able to get a lower interest rate and qualify more easily than with a conventional loan.
  • Your down payment: The lender expects you to put a certain percentage of the total cost down when you buy a home. Let’s say your home is $150,000 and you put 10% down. You’ll need to come up with $15,000 before you close. The higher the down payment, the better the interest rate.
  • Your cash reserves: A lender is all about reducing its risk. Any extra money you set aside helps with that. Let’s say you have enough money in savings to pay your mortgage for 4 months — your lender will see you as less likely to stop making payments if your employment changes.

What is a Mortgage Type?

The mortgage rates you pay usually depend on the type of mortgage you can get. Here are the various mortgage options many lenders offer.

  • Conventional: A conventional loan is a loan not backed by the federal government. The lender faces a loss if you default, which makes it riskier for the lender than other types of loans.
  • FHA: The Federal Housing Authority insures loans to consumers to encourage homeownership. You’ll see easier approval and lower closing costs with these loans.
  • USDA: The U.S. Department of Agriculture provides assistance to those buying homes in areas it has designated as rural. You can check address eligibility on the USDA website.
  • VA: Current and former military service people and their families qualify for this type of loan. The federal government backs loans to military members issued by participating lenders.

What is a Mortgage Term?

Part of your purchase quote process requires letting the lender know how long you need to pay back the loan. Here are 3 of the most popular options:

  • 30-year fixed: This loan stretches your payments over 30 years and gives you lower monthly payments. You may not get the best deal on interest if you go this route.
  • 15-year fixed: You can save on higher payments by enjoying lower interest rates. But your monthly payments will be higher with a 15-year loan.
  • 5/1 ARM: You might think your financial situation will improve over the next few years and an adjustable-rate mortgage could be a good idea. This loan locks you at a low-interest rate for the first 5 years and bumps up a higher rate once that term is up.

Current Mortgage Rates in Indiana

We know mortgage rates can change day-to-day and ours reflect the most up-to-date rates. Interest rates are set individually by lenders, fluctuating based on the overall economy and housing market.

Loan TypeRateAPR
30-year fixed 6.749% 6.77%
15-year fixed 5.812% 6.101%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) N/A N/A
Rates based on an average home price of $173,277 and a down payment of 20%.
See more mortgage rates on Zillow

Calculating Interest in Indiana

The lower your home cost, the less you’ll likely pay in interest over time. Lenders look at the amount remaining on the loan at the end of each month. That amount is multiplied by your interest rate and divided by 12. The lower that amount, the less you’ll be required to pay.

CityAverage Home ValueLoan TermCurrent RateDownpayment (20%)Monthly PaymentTotal Interest Paid
Indianapolis $145,80030-year fixed6.557%$29,160$741.62$150,343.20
Fort Wayne $138,00030-year fixed6.557%$27,600$701.95$142,302.00
Bloomington $201,30030-year fixed7.025%$40,260$1,074.11$225,639.60
Evansville $121,60030-year fixed6.557%$24,320$618.53$125,390.80
See more mortgage rates on Zillow

Lender Credit Score Minimums in Indiana

Your credit score is a number issued by multiple credit bureaus. Those numbers are combined to get an overall credit score that lenders use to determine your creditworthiness. Minimums are different from 1 lender to the next.

LenderMinimum Credit Score Required
Figure Home Equity600
Rocket Mortgage®620
First California Mortgage640
Vylla620
SoFi620

Affordable Rates on Indiana Mortgages

Check rates at a variety of lenders before you start house shopping. Include local banks and credit unions, but also check corporate banks and mortgage companies. You’ll likely find interest rates fall within a small range, but even a fraction of a percentage point can make a difference in the long term. 

Get Ready for Take Off

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You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.