Alabama Mortgage Rates for August 2019

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Currently, the average rate on a 30-year mortgage in Alabama is 4.15%. 15-year fixed-rate mortgages have an average rate of 3.73%, while 5/1 adjustable-rate mortgages (ARM) average at 3.88%.

Loan typeAverage rateWeekly change3-month change
30-year fixed4.15%–0.04%–0.28%
15-year fixed3.73%–0.03%–0.28%
5/1 ARM3.88%–0.05%–0.13%
Rates for a $200,000 loan with 20% down payment

For most Alabamians, getting a mortgage is a necessary step towards becoming a homeowner. With home values in the hundreds of thousands, finding the right interest rate is crucial to making sure that your home loan is an affordable one. We keep track of mortgage rates for lenders and cities across Alabama so that you can get a sense for what a fair deal looks like at today's rates.

Best Mortgage Rates in Alabama

Alabama's lowest available rate for a 30-year mortgage is currently 3.50%.15-year mortgages can be found from rates starting at 2.88%, while 5/1 ARMs start at 2.95%.

Every mortgage applicant is bound to get slightly different rate quotes, even from the same group of lenders. Individual credit score, debt history, and income figures all affect the underwriting process that lenders use to construct mortgage rate offers. However, there are also a number of systemic factors that affect all interest rates regardless of individual details. These include national economic conditions and lender attitudes towards risk.

To see how mortgage rates have been affected by these external variables, we've analyzed Alabama's rate trends from several different angles. This involved tracking averages over time as well as collecting rates from a selection of major companies and locations within the Yellowhammer State.

Current Mortgage Rate Forecast for Alabama

For 2019, mortgage rates in Alabama and the rest of the country may not rise as much as previously forecasted. The Federal Reserve's Open Market Committee (FOMC) recently announced that it would "be patient" and adopt a data-dependent approach to future rate hikes, to guard against the risk of hiking too quickly.

Line graph of average U.S. 30-year mortgage rates vs. effective federal funds rate since 2014

This diverges significantly from market expectations at the end of 2018, when the FOMC raised the target rate by 25 basis points. Currently set at 2.25%-2.50%, the target federal funds rate represents the cost that banks pay to borrow money for their operations. Due to the effect that the federal funds rate has on the interest rates of consumer loans and deposit accounts, the FOMC's periodic announcements are regarded as indicators of future rate trends.

For homebuyers in Alabama, the news of stabilizing rates creates some breathing room for a more deliberate shopping process. In times of rising rates, people often rush to secure financing before loan costs get too high. With the FOMC announcing its intent to monitor the market before considering future hikes, buyers can take comfort in knowing that mortgage rates won't explode while they're shopping for the right property and lender.

Rates at Alabama's Most Popular Mortgage Lenders

There's no shortage of banks and direct lenders offering home financing in Alabama, which makes it possible to request quotes from a variety of sources and compare your options. We looked at mortgage rates from some of the largest banks in the state to figure out what most lenders are willing to offer.

Column graph comparing 30-year mortgage rates at major Alabama banks

Unlike many other states we examined, banks in Alabama reported a very large margin between the lowest and highest mortgage rates. While these figures are bound to change over time and from applicant to applicant, the magnitude of difference is large enough that we recommend all prospective homebuyers should take the extra time to ask for loan quotes from as many lenders as possible.

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Comparing Home Loan Rates by City

With so much variation among the state's lenders, we tried taking a closer look at how mortgage rates might change from city to city in Alabama. Average rate numbers from the state's largest metros revealed that location has a much smaller effect on mortgage rates than lender choice.

MSAAverage mortgage rateMedian home value
Birmingham-Hoover4.59%$169,344
Huntsville4.57%$184,310
Mobile4.53%$134,308
Montgomery4.56%$141,018
Average rate is for a 30-year mortgage with a 20% down payment.

If you're considering moving to a different city, your housing costs will be more affected by changes in property value than by fluctuations in mortgage rates. Improvements in lending techniques and technology have made mortgages accessible from anywhere, which keeps the cost of credit fairly similar nationwide. On the other hand, the price of property—an immovable physical asset—is highly dependent on location.

Evaluating Your Mortgage Options: An Example in Birmingham

Other than the factors we've already explored, a borrower's choice of loan type also impacts mortgage rate. To illustrate how this works in Alabama, we can apply current figures to a hypothetical home purchase in Birmingham for $200,000. Assume we start with a down payment of 20% on that value.

At today's average rate for a 30-year mortgage in Birmingham, the homeowner would pay a monthly minimum of $820 to cover principal and interest. Total interest would cost $134,940 over 30 years. Most people find this schedule works well enough, but there are alternatives that can save you considerable amounts on your interest.

Consider the case of a younger family that plans to sell their home and move on as their children grow up. For short-term homeowners, the lower rates on 5/1 ARMs can be a more affordable alternative to the 30-year fixed rate mortgage. In the Birmingham example, the monthly payment on a 5/1 ARM would start at $753 during the first five years. After that, the rate can increase depending on how the index rate changes.

For people who want to own their home at minimum cost, a 15-year loan is worth exploring. At current state averages, this loan would cost $1,162 per month but $49,155 in total over 15 years. So long as you're willing to build the higher monthly payments into your budget, a shorter 15-year mortgage can save you a hefty percentage on interest.

Currently, the average rate on a 30-year mortgage in Alabama is 4.15%. 15-year fixed-rate mortgages have an average rate of 3.73%, while 5/1 adjustable-rate mortgages (ARM) average at 3.88%.

Loan typeAverage rateWeekly change3-month change
30-year fixed4.15%–0.04%–0.28%
15-year fixed3.73%–0.03%–0.28%
5/1 ARM3.88%–0.05%–0.13%
Rates for a $200,000 loan with 20% down payment

For most Alabamians, getting a mortgage is a necessary step towards becoming a homeowner. With home values in the hundreds of thousands, finding the right interest rate is crucial to making sure that your home loan is an affordable one. We keep track of mortgage rates for lenders and cities across Alabama so that you can get a sense for what a fair deal looks like at today's rates.

Alabama's lowest available rate for a 30-year mortgage is currently 3.50%.15-year mortgages can be found from rates starting at 2.88%, while 5/1 ARMs start at 2.95%.

Every mortgage applicant is bound to get slightly different rate quotes, even from the same group of lenders. Individual credit score, debt history, and income figures all affect the underwriting process that lenders use to construct mortgage rate offers. However, there are also a number of systemic factors that affect all interest rates regardless of individual details. These include national economic conditions and lender attitudes towards risk.

To see how mortgage rates have been affected by these external variables, we've analyzed Alabama's rate trends from several different angles. This involved tracking averages over time as well as collecting rates from a selection of major companies and locations within the Yellowhammer State.

For 2019, mortgage rates in Alabama and the rest of the country may not rise as much as previously forecasted. The Federal Reserve's Open Market Committee (FOMC) recently announced that it would "be patient" and adopt a data-dependent approach to future rate hikes, to guard against the risk of hiking too quickly.

Line graph of average U.S. 30-year mortgage rates vs. effective federal funds rate since 2014

This diverges significantly from market expectations at the end of 2018, when the FOMC raised the target rate by 25 basis points. Currently set at 2.25%-2.50%, the target federal funds rate represents the cost that banks pay to borrow money for their operations. Due to the effect that the federal funds rate has on the interest rates of consumer loans and deposit accounts, the FOMC's periodic announcements are regarded as indicators of future rate trends.

For homebuyers in Alabama, the news of stabilizing rates creates some breathing room for a more deliberate shopping process. In times of rising rates, people often rush to secure financing before loan costs get too high. With the FOMC announcing its intent to monitor the market before considering future hikes, buyers can take comfort in knowing that mortgage rates won't explode while they're shopping for the right property and lender.

There's no shortage of banks and direct lenders offering home financing in Alabama, which makes it possible to request quotes from a variety of sources and compare your options. We looked at mortgage rates from some of the largest banks in the state to figure out what most lenders are willing to offer.

Column graph comparing 30-year mortgage rates at major Alabama banks

Unlike many other states we examined, banks in Alabama reported a very large margin between the lowest and highest mortgage rates. While these figures are bound to change over time and from applicant to applicant, the magnitude of difference is large enough that we recommend all prospective homebuyers should take the extra time to ask for loan quotes from as many lenders as possible.

Get Multiple Mortgage Offers at Once
Get Multiple Mortgage Offers at Once
LendingTree can help you find and compare mortgage rates, all without affecting your credit.
LendingTree is our ultimate parent company
See Offers

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Comparing Home Loan Rates by City

With so much variation among the state's lenders, we tried taking a closer look at how mortgage rates might change from city to city in Alabama. Average rate numbers from the state's largest metros revealed that location has a much smaller effect on mortgage rates than lender choice.

MSAAverage mortgage rateMedian home value
Birmingham-Hoover4.59%$169,344
Huntsville4.57%$184,310
Mobile4.53%$134,308
Montgomery4.56%$141,018
Average rate is for a 30-year mortgage with a 20% down payment.

If you're considering moving to a different city, your housing costs will be more affected by changes in property value than by fluctuations in mortgage rates. Improvements in lending techniques and technology have made mortgages accessible from anywhere, which keeps the cost of credit fairly similar nationwide. On the other hand, the price of property—an immovable physical asset—is highly dependent on location.

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Get Multiple Mortgage Offers at Once
LendingTree can help you find and compare mortgage rates, all without affecting your credit.
See Offers

on LendingTree's secure website. NMLS #1136: terms and conditions apply

Powered by
LendingTree is our ultimate parent company
Get Multiple Mortgage Offers at Once
Get Multiple Mortgage Offers at Once
LendingTree can help you find and compare mortgage rates, all without affecting your credit.
LendingTree is our ultimate parent company
See Offers

on LendingTree's secure website. NMLS #1136: terms and conditions apply

Powered by
LendingTree is our ultimate parent company