Buying in Malibu or Santa Monica often means solving a financing question before anything else. Because home prices in both markets are so high, many buyers end up comparing jumbo loans, conforming options near local loan limits, ARMs, or other specialized financing strategies.
That two-city comparison still matters. Malibu and Santa Monica can present different price points, property types, and payment scenarios, but both markets usually require more planning around down payment, reserves, and qualification than a lower-priced purchase.
In this article, we’ll compare mortgage options and financing considerations for buyers looking at homes in Malibu and Santa Monica.
Malibu and Santa Monica are both coastal cities located within Los Angeles County. But from a real estate market perspective, the similarities end there.
While both markets have home prices much higher than the national average, Malibu is generally the pricier of the two. That’s the first thing home buyers need to know, when weighing their mortgage options for luxury homes.
For some perspective, here were the median home prices in April-May 2026:
Because of these high prices, most home buyers in Santa Monica and Malibu use conventional mortgage financing as opposed to government-backed loans. And a lot of those conventional mortgages fall into the “jumbo” range due to their large size.
But before we go any further, we should define some important terminology:
Jumbo loans tend to be more commonly used for high-priced real estate in Southern California, and less common in more affordable parts of the country.
In a city like Malibu, for example, typical home prices are well above the conforming limit for conventional loans. It’s also higher than the limits used for FHA loans. So those loans aren’t very useful in such a market.
Santa Monica home prices are lower than Malibu, but still miles above the national average. So a home buyer in Santa Monica might have more options when it comes to mortgage financing.
The bottom line: In expensive real estate markets, many home buyers have to rely on jumbo loans to clear the hurdle. These loans may require a larger down payment and higher credit score, when compared to their conforming counterparts. But they’re also very useful.
The right loan path often comes down to how your purchase price, cash position, and income profile line up.
As you weigh these options, focus on a few practical questions: How much home are you buying relative to local loan limits? How much cash do you want to commit up front? How predictable is your income documentation? How much reserve flexibility do you need? And how long do you realistically expect to keep the property? Those answers usually narrow the field quickly.
Here are a few strategies that can materially change payment, cash-to-close, or qualification flexibility when buying in Santa Monica or Malibu.
Discount points: Paying discount points increases your upfront closing costs, but it can reduce the interest rate and monthly payment. In a high-balance loan scenario, even a small rate improvement can have a meaningful effect, so this strategy is usually most useful when you expect to keep the mortgage long enough to recover the added cost.
Portfolio loans: These are mortgages that lenders keep in their own portfolio, rather than selling them. That can create more qualification flexibility for some buyers, especially when income, assets, or property details do not fit standard agency or jumbo guidelines cleanly. The tradeoff is that rates, down payment expectations, or reserve requirements may be less favorable than other options.
ARM loans: Adjustable-rate mortgage (ARM) loans often start with lower interest rates compared to fixed-rate mortgages, which can lower the initial monthly payment on an expensive home. For buyers who expect to move, sell, or refinance within five to seven years, that lower starting cost may be worth comparing against the long-term certainty of a fixed-rate loan.
Current mortgage rates in California vary based on factors like lender, loan type, and borrower credit profile. For buyers in high-cost markets like Malibu and Santa Monica, a single published rate snapshot is usually less useful than understanding what actually moves your pricing.
Rate shopping matters, but so does loan structure. A conforming loan, jumbo loan, ARM, or portfolio product can price very differently even for the same borrower. Your down payment, credit profile, reserves, property type, and documentation strength can also affect the rate and overall financing cost.
That’s why coastal buyers usually benefit from comparing more than one path instead of focusing only on a statewide average. In many cases, the better question is not just “What is the rate today?” but “Which loan structure gives me the best balance of payment, cash to close, and qualification flexibility?”
Before you buy in a high-priced market like Malibu or Santa Monica, focus on the preparation steps that improve financing readiness:
We talked about the price difference between the Malibu and Santa Monica real estate markets. While both cities are considered luxury markets, homes in Malibu tend to be more expensive.
From a financing standpoint, that difference can shape your loan choices. A higher purchase price can push more Malibu buyers into jumbo territory, while some Santa Monica buyers may have a little more room to compare loan structures depending on price point, down payment, and target payment.
Property mix can matter too. Buyers should compare not just headline pricing, but how each target property affects monthly payment, cash to close, and the likelihood of needing a more specialized mortgage.
Ultimately, both Malibu and Santa Monica are expensive markets, and for good reason. If you plan to buy in these beachfront locations, you’ll need to look at the appropriate home loans for million-dollar properties.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
Many do, because home prices in both markets are high enough to push loan amounts above conforming limits. Jumbo loans are especially common in Malibu, while some Santa Monica buyers may still be able to compare conforming or high-balance conventional options depending on price, down payment, and loan size.
Sometimes, especially in Santa Monica if the purchase price and down payment keep the loan amount near local limits. In Malibu, higher prices more often push buyers into jumbo financing, so conforming or high-balance options may be less practical.
Jumbo loans often come with stricter credit, income, reserve, and down payment requirements because they exceed conforming limits and are not eligible for purchase by Fannie Mae or Freddie Mac. Buyers usually need stronger documentation and a more solid overall financial profile than they would for a standard conforming loan.
The exact amount varies by lender, loan type, credit profile, and property, but buyers in high-cost coastal markets often need to plan for a meaningful down payment. It is also important to budget for closing costs and any reserve requirements, not just the down payment itself.
They can be worth comparing. An adjustable-rate mortgage may offer a lower initial payment, which can help in high-cost markets, and that may make sense for buyers who expect to sell, move, or refinance within a shorter time frame. The tradeoff is less long-term rate certainty than a fixed-rate loan.
Start with the likely purchase price, then compare how each target property affects your monthly payment, cash to close, reserves, and loan type. Malibu often pushes buyers further into jumbo territory, while some Santa Monica purchases may allow more flexibility in loan structure depending on the price point and down payment.
Common options include conforming or high-balance conventional loans, jumbo loans, adjustable-rate mortgages, and portfolio loans. The best fit usually depends on the purchase price, cash available for the down payment, reserves, income documentation, and how long the buyer expects to keep the property.
There is no single average rate that reliably answers that question for Malibu buyers. Pricing depends on the lender, loan type, credit profile, down payment, reserves, property type, and documentation strength. In a market like Malibu, comparing different loan structures can be more useful than focusing on one published rate snapshot.
Portfolio loans are mortgages that a lender keeps instead of selling. They can help buyers whose income, assets, or property details do not fit standard conforming or jumbo guidelines cleanly. In exchange for that flexibility, the rate, down payment expectations, or reserve requirements may be less favorable.
It can make sense when reducing the interest rate meaningfully lowers the monthly payment and the buyer expects to keep the loan long enough to recover the upfront cost. On a large loan amount, even a small rate reduction can have a noticeable effect, so this strategy is often worth comparing carefully.
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