Seattle Jumbo Loan Rates Can Be Lower Than Conforming

October 26, 2017
Last updated:
May 6, 2022
Post cover image
In This Article

The interest rate assigned to conforming loans versus jumbo loans can often differ. And many people may assume that a smaller loan amount would translate to a lower rate. But that’s not always the case, as we’ll explain in this article.

The median home price in Seattle is now around the $958,027 mark as of May 2022. Given the high price of homes in Seattle relative to other centers in Washington State, a higher percentage of home buyers in Seattle are using jumbo mortgage loans to finance their purchases.

You might think a jumbo loan would come with a higher interest rate, since there’s a higher amount being borrowed. But that’s not always the case. In fact, Seattle jumbo loan rates can sometimes be lower (on average) than the rates assigned to conforming mortgage loans.

Getting a “Big” Mortgage Loan in Seattle

A conforming loan is one that meets the size requirements used by Freddie Mac and Fannie Mae, the government-sponsored corporations that buy loans from lenders. These limits vary by county because they are based on home prices.

When a person borrows more than the conforming loan limit for his or her county, it’s referred to as a jumbo mortgage loan.

In King County, Washington, the conforming loan limit for a single-family property is $891,250 for 2022. So anything above that would be considered jumbo.

Some mortgage shoppers shy away from jumbo loans in Seattle, thinking they will have to pay a higher mortgage rate. But that’s not always the case. There are a variety of factors that determine the rate you receive on a home loan, including your credit score, the amount you put down, and other factors.

The data show that Seattle jumbo loan rates are not always higher than their conforming counterparts. In fact, a report published earlier this year showed quite the opposite.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans.

Today’s Seattle Mortgage

Report: Jumbo Loan Rates Similar to Conforming

Recent data shows that borrowers nationwide are getting similar rates on jumbo loans to smaller conforming mortgage loans.

At the time of this article’s publishing date, the average interest rate assigned to 30-year fixed mortgages with conforming loan balances of $647,200 or less in Washington State was 5.19%.

The average interest rate for jumbo loans (those that exceeded the baseline loan limit of $647,200) was 5.03%, which is very similar to rates for conforming loans, though a bit lower.

Joel Kan, an economist with the MBA, told CNBC: “A strong appetite for jumbo loans in a highly competitive jumbo market has led to increased availability and lower pricing … over the past few years.”

In the past, jumbo loan rates in Seattle and nationwide were almost always higher than the rates assigned to conforming mortgage products (on average). But this trend reversed a few years ago, and since then we have often seen lower average rates for jumbo mortgages than their smaller conforming counterparts, as we are seeing today.

Get a Quote to Find Out Where You Stand

This article underscores the importance of getting a specific rate quote tailored to your particular situation. The average interest rates reported by industry groups (and widely covered by the media) are useful in the sense that they help us track trends over time. But the actual rates assigned to a particular home loan can vary based on a number of factors.

The moral of this story: Seattle jumbo loan rates are not always higher than conforming, and in some cases they can be quite a bit lower. There are several variables that can affect your borrowing costs. So the logical next step would be to obtain a rate quote based on your situation.

Get an Instant Mortgage Rate Quote Today

Need a Mortgage?

Sammamish Mortgage is a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We have been in the business since 1992 and are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Please contact us if you have any questions or are ready to apply for a home loan.

Other Blogs You May Like
Jumbo Loans More Popular as Seattle Home Prices Continue to Climb
March 22, 2022
3 min read
Jumbo Loans More Popular as Seattle Home Prices Continue to Climb
A jumbo loan is a type of mortgage that is made in an amount over the conventional conforming loan...
What Is a Jumbo Loan in Washington State in 2022?
March 15, 2022
5 min read
What Is a Jumbo Loan in Washington State in 2022?
In this post, we will go over the basics of jumbo loans in Washington State in 2022. Read on to...
Show 10 more posts
from this category

Connect with America’s Lending Experts today!

Whether you’re buying a home or ready to refinance, our professionals can help.

Compare Mortgage Rates in Your Area Instantly

No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.