Comprehensive Guide to Mortgage Rates in Montana

Mortgage Rates in Montana

There are a ton of good reasons to call the Big Sky Country your next destination for real estate investment. To begin with, its low population density gives rural residents plenty of room, and there are also excellent colleges and vibrant college towns. There are business chances for aspiring entrepreneurs because the state is even establishing a reputation as a high-tech hotspot.

Over the previous ten years, the state’s median property values have steadily increased thanks to the expansion of Montana’s economy. Despite the rise in property values and mortgage rates in Montana being higher than the national average, the mortgage market is still booming. Monthly homeownership costs are cheaper than in many other states, making Montana real estate purchases there more attractive.

If you are looking to buy a house to invest in real estate in Montana, we have narrowed down the current mortgage rates and trends:

Overview of Montana Mortgage Rates

The state of Montana offers both programs for current homeowners and first-time homebuyers. Homebuyers that use state funds benefit from financial incentives like a down payment and closing cost assistance or an interest rate that is competitively cheaper.

Programs for first-time homebuyers in Montana

The state’s rental and homeownership programs, including those for first-time homebuyers, are managed by Montana Housing. In order to make homeownership more accessible, Montana Housing collaborates with the nonprofit NeighborWorks Montana. A first-time homebuyer is defined by the state as a borrower who has not bought a property in the previous three years.

Program for Regular Bonds

The Regular Bond Program for Montana Housing enables qualified first-time homebuyers to acquire a single-family residence, a condominium, or a prefabricated home in the state with 30-year, low-interest mortgages.

Borrowers must adhere to location-based household income and purchase price constraints, and the interest rates fluctuate and are depending on credit history.

Borrowers need a credit score of 680 or above, a front-end debt ratio of 31 percent or less, and a back-end debt ratio of 41 percent or less to be eligible for a Federal Housing Administration (FHA), Veterans Affairs (VA), United States Department of Agriculture (USDA), or Section 184 first mortgage, and may be required to complete a homebuyer education course. The homebuyer education prerequisite may be waived if all three conditions are met.

Programs for Down Payment Assistance

First-time homebuyers in Montana can get state aid for their down payment and closing costs through the Regular Bond Program and the Down Payment Assistance program offered by Montana Housing.

There are two schemes that offer help with the down payment:

  • Bond Benefit DPA: A low-interest, 15-year mortgage with a maximum loan amount of $10,000 that can be obtained with a $1,000 down payment, 620 minimum credit score, and successful completion of a homebuyer education course.
  • MBOH Plus 0% Deferred DPA: Mortgages of up to 5% of the purchase price, up to $10,000, with 0% interest and no monthly payments; due after the first mortgage has been paid off or the property is refinanced or sold; require a borrower’s $1,000 down payment, a credit score of at least 620, a debt-to-income ratio of no more than 45%, and completion of a homebuyer education course; income limits of no more than $55,000 also apply.

Montana mortgage application

Currently, the average interest rate for 30-year fixed-rate mortgages in Montana is 3.91%, while the average interest rate for 15-year fixed-rate mortgages is 3.38%. Thus, at 3.52% and 2.84%, respectively, the mortgage rates in Montana are relatively higher than the national average. The median home price in the state is $219,600, which is similar to the national average. Due to lower additional homeownership costs in Montana, the state’s homeownership rate is 3.9% higher than the national average.

Given that mortgage rates are likely to continue to decrease nationally and in Montana, owning a home may become even more feasible. Additionally, a real estate and rental marketplace, projects that COVID-19’s effects will cause property values in Montana to decline by 1.4% through March 2021.

  • Home median cost: $219,600
  • 3.91% is the typical 30-year fixed rate.
  • Average mortgage payment per month: $1,386
  • Rate of home ownership: 67.7%

Mortgage rates in Montana

Starting at the end of 2018, mortgage rates in Montana steadily dropped over the course of about a year. Early in 2020, before the impacts of COVID-19 were felt, rates started to rise. The 30-year fixed term, 15-year fixed term, 5/1 ARM, and refinancing rates all change in accordance with this pattern.

Over the previous two years, the state of Montana’s mortgage rates have generally changed in line with those of the nation.

Current mortgage rates in Montana

In comparison to the national average of 3.52%, Montana’s current 30-year fixed rate of 3.91% is higher. The 30-year refinance rate, which is set at 3.88%, is 3 basis points less than the purchase rate. Both the 5/1 adjustable-mortgage rate of 3.5% and the 15-year fixed rate of 3.38% are higher than the average rates in the country.

The state mortgage rates for new home purchases in Montana have decreased consistently over the last three months as a result of the prolonged economic uncertainties brought on by COVID-19. This holds true for fixed-rate mortgages with terms of 30, 15, and adjustable rates. Similar trends can be seen in refinancing rates.

Financing options for home in Montana

Eighty Percent Combination Plan

Homebuyers who qualify for Montana Housing finance can apply for a program called 80% Combined that offers an alternative to an FHA-insured loan and does not require mortgage insurance. The borrower will be saddled with two loans on the property: a first mortgage at 80% for 30 years and a second mortgage at 20% for the same term.

Veterans Home Loan Program in Montana

The Montana Veterans’ Home Loan Program aids locals who are presently serving, have previously served, or have been members of the armed forces or Montana National Guard in purchasing their first home. The program provides mortgages with interest rates that are 1% below those of the current market. There are no restrictions on buying price or income.

Credit Certificate for Mortgages

A federal tax benefit known as the Mortgage Credit Certificate (MCC) for Montana reduces the borrower’s federal income tax obligation. The credit is worth up to $2,000 each year and covers 20% of the mortgage interest. The credit is not available to borrowers who have a Montana Housing loan.

Refinancing a mortgage in Montana

A refinancing program for mortgages is not offered by Montana Housing. You can save tens of thousands of dollars over the course of your mortgage by refinancing to a lower interest rate, which will also cut your monthly payments. If you’re thinking about refinancing, examine the details of each loan offer from different lenders to get the best refinance rate.

Hard money loans

Hard money loans are easier to obtain than traditional loans because they have fewer prerequisites. Instead of relying on the borrower’s income or credit history to secure the loan, the asset’s potential future profits are utilized instead. The hard money lender in Montana will put up a sizable portion of the money needed to cover the property’s future market value. Hard money fix and flip loans are short-term loans often have repayment terms of one year or less, making it an ideal choice for investors looking to rehab properties and sell them for profit. There are also hard money rental loans available in Montana for that have flexible 30 year amortization plans for longer term investors.

Mortgage resources and intricacies in Montana

There are certain important considerations when getting a mortgage in Montana. For example, Montana does not impose a transfer tax on real estate, which could result in a sizable cost reduction for homebuyers. Mortgage holders may be eligible to deduct the interest on their mortgage from their taxable income.

Another benefit for mortgage holders relates to foreclosures: In the event that your Montana property is put up for foreclosure and the proceeds of the sale are inadequate to pay off your outstanding mortgage, creditors will not be able to seize any of your other assets to cover the debt.

However, keep in mind that the state has laxer seller disclosure laws than other states when searching for a suitable property. This indicates that a physical inspection is essential to determine the condition of the structure as a whole.

Every county in Montana has a maximum conforming loan limit of $510,400.

The Montana Board of Housing website is worth visiting if you’re looking for a helpful resource for getting a mortgage and buying a house. In order to provide access to sustainable and affordable housing, Montana Housing collaborates with regional groups and makes use of federal housing subsidies. You may learn more about things like housing assistance programs, down-payment assistance, and educational topics for people planning to buy a home in the state.


In comparison to many other states, Montana offers more affordable property ownership. There aren’t any taxes to worry about on property transactions, and home values are typically more reasonable. Serious purchasers may think that the present is a fantastic time to buy given predictions that home prices will decline and mortgage rates will stay low in the near future.

By joining forces with 14th Street Capital, you can gain access to the thriving Montana real estate market as a preferred hard money lender. As a seasoned hard money lender in Montana, we offer you the honesty and knowledge you need to succeed.