Mortgage rates held steady this week, remaining at their lowest point since October 2024. According to Freddie Mac, the 30-year fixed mortgage rate is unchanged at 6.58% while the 15-year rate slipped two basis points to 5.69%. With calm rates, it could be a good time to lock in a mortgage rate.

“The 30-year fixed-rate mortgage remained flat this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Over the summer, rates have come down and purchase applications are outpacing 2024, though a number of homebuyers continue waiting on the sideline for rates to further decrease.”

Read more: How to buy a house in 13 simple steps

Here are the current mortgage rates, according to the latest Zillow data:

30-year fixed: 6.55%

20-year fixed: 6.15%

15-year fixed: 5.72%

5/1 ARM: 6.82%

7/1 ARM: 6.77%

30-year VA: 6.14%

15-year VA: 5.55%

5/1 VA: 5.99%

Remember, these are the national averages and rounded to the nearest hundredth.

Learn more: How to get the lowest mortgage rate possible

Here are today's mortgage refinance interest rates, according to the latest Zillow data:

30-year fixed: 6.61%

20-year fixed: 6.17%

15-year fixed: 5.86%

5/1 ARM: 7.18%

7/1 ARM: 7.04%

30-year VA: 6.12%

15-year VA: 5.52%

5/1 VA: 5.63%

As with the purchase mortgage rates, these are national averages we've rounded to the nearest hundredth. Refinance rates can be higher than purchase mortgage rates, but that isn't always the case.

Use the mortgage calculator below to see how various mortgage rates will impact your monthly payments.

The free Yahoo Finance mortgage payment calculator goes even deeper by including factors like homeowners insurance and property taxes in your calculation. You can even add private mortgage insurance costs and HOA dues if they apply to you. These monthly expenses, along with your mortgage principal and interest rate, will give you a realistic idea of what your monthly payment could be.

A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. There are two basic types of mortgage rates: fixed and adjustable rates.

A fixed-rate mortgage locks in your rate for the entire life of your loan. For example, if you get a 30-year mortgage with a 6% interest rate, your rate will stay at 6% for the entire 30 years. (Unless you refinance or sell the home.)

An adjustable-rate mortgage keeps your rate the same for the first few years, then changes it periodically. Let’s say you get a 5/1 ARM with an introductory rate of 6%. Your rate would be 6% for the first five years and then the rate would increase or decrease once per year for the last 25 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and U.S. housing market.

At the beginning of your mortgage term, most of your monthly payment goes toward interest. As time passes, less of your payment goes toward interest, and more goes toward the mortgage principal or the amount you originally borrowed.

Dig deeper: Adjustable-rate vs. fixed-rate mortgage — Which should you choose?

Two categories determine mortgage rates: ones you can control and ones you cannot control.

What factors can you control? First, you can compare the best mortgage lenders to find the one that gives you the lowest rate and fees.

Second, lenders typically extend lower rates to people with higher credit scores, lower debt-to-income (DTI) ratios, and considerable down payments. If you can save more or pay down debt before securing a mortgage, a lender will probably give you a better interest rate.

What factors can you not control? In short, the economy.

The list of ways the economy impacts mortgage rates is long, but here are the basic details. If the economy — think employment rates, for example — is struggling, mortgage rates go down to encourage borrowing, which helps boost the economy. If the economy is strong, mortgage rates go up to temper spending.

With all other things being equal, mortgage refinance rates are usually a little higher than purchase rates. So don't be surprised if your refinance rate is higher than you may have expected.

Two of the most common mortgage terms are 30-year and 15-year fixed-rate mortgages. Both lock in your rate for the entire loan term.

A 30-year mortgage is popular because it has relatively low monthly payments. But it comes with a higher interest rate than shorter terms, and because you’re accumulating interest for three decades, you’ll pay a lot of interest in the long run.

A 15-year mortgage can be great because it has a lower rate than you’ll get with longer terms, so you’ll pay less in interest over the years. You’ll also pay off your mortgage much faster. But your monthly payments will be higher because you’re paying off the same loan amount in half the time.

Basically, 30-year mortgages are more affordable from month to month, while 15-year mortgages are cheaper in the long run.

According to 2024 Home Mortgage Disclosure Act (HMDA) data, some of the banks with the lowest median mortgage rates are Bank of America and Citibank. However, it's a good idea to shop around for the best rate with not just banks, but also credit unions and companies specializing in mortgage lending.

Yes, 2.75% is a fantastic mortgage rate. You're unlikely to get a 2.75% rate in today's market unless you take on an assumable mortgage from a seller who locked in this rate in 2020 or 2021, when rates were at all-time lows.

According to Freddie Mac, the lowest-ever 30-year fixed mortgage rate was 2.65%. This was the national average in January 2021. It is extremely unlikely that rates will dip below 3% again anytime soon.

Some experts say it's worth refinancing when you can lock in a rate that's 2% less than your current mortgage rate. Others say 1% is the magic number. It all depends on what your financial goals are when refinancing, and when your break-even point would be after paying refinance closing costs.

A housing market crash happens when home values plummet due to a lack of demand for or an oversupply of homes. The factors leading to a housing market crash are varied, ranging from economic recessions, depressions, and job losses to high mortgage rates that make buying a home widely unaffordable.

A housing crash can have upsides for some home buyers, with lower prices making homes more affordable. For instance, during the last housing market crash in 2008, home prices dropped over 15% compared to 2007, according to the S&P/Case Shiller Home Price Indexes. For other buyers, however, a crash means losing built-up home equity and tighter finances that could lead to falling behind on mortgage payments.

What’s ahead for the housing market in 2025? Experts say there’s no crash in sight, and home prices and sales are expected to remain on a slightly upward swing.

Read more: How to recession-proof your house as a homeowner

In this article:

When will the housing market crash?

Housing market crashes: Supply and demand dynamics

Housing crisis lessons for today

Signs of a housing market crash

What a crash could mean for home buyers

What a crash could mean for sellers

How to prepare for a potential housing market crash

FAQs

In general, economists don’t foresee a housing market crash anytime in 2025. According to recent insights from JPMorgan, it’s predicted that supply won’t outpace the demand for homes.

Housing experts point out that home supply is gradually increasing — but the operative word is “gradually.” Supply would have to move much faster to contribute to a crash.

“Unless there is a significant surge in the rate of unemployment, which is currently not in the forecast, the housing market is expected to continue to rebound from 2023 lows,” said Selma Hepp, chief economist of real estate data analytics firm Cotality, in an email.

Current data backs that up, with the June 2025 jobs data from the U.S. Bureau of Labor and Statistics showing unemployment at 4.1% — virtually unchanged from June 2024.

Are home prices slumping? A little bit. In a recent report, Cotality reported that May’s year-over-year home prices cooled off by 5% from May 2024. However, plenty of states (especially in the Midwest) still experienced price increases.

Zillow’s July 2025 Home Value and Home Sales Forecast predicts national home prices will decrease overall in 2025, ending the year 2% lower than they began.

Hepp anticipated that home sales would likely increase due to lower mortgage interest rates and a rise in the number of existing homes on the market. Although mortgage rates probably won’t plummet this year, they should drop at least a little compared to 2024.

Learn more: Why are home prices so high?

For the housing market to crash, supply and demand must be drastically out of balance, favoring supply. Looking back at the first half of 2025, we can see that while supply is increasing, the discrepancy isn’t as drastic as it was in 2008. As of July 2025, the Federal Reserve Bank of St. Louis showed a housing supply of nearly 10 months.

“In a normal market balanced between buyers and sellers, we would have a six-month supply of homes,” said Rick Sharga, founder and CEO of CJ Patrick Co., a market intelligence firm for real estate and mortgage companies. For comparison, the buildup to the 2008 financial crisis led to a drastic oversupply — 13 months. That was more than double the average figure of six months and more than a ways to go from the current 9.8-month supply.

There’s also demand chipping away at the current market supply, likely driven in part by consumers taking advantage of declining mortgage rates. For instance, in late July 2025, the average rate for a 30-year fixed-rate mortgage was 6.74%. While these aren’t the rock-bottom rates seen in early 2021, those sub-3% mortgage rates are unlikely to return. Hence, buyers eager to buy are getting a foothold in the market where they can start building equity. If interest rates decline, owners can always refinance for additional savings.

Dive deeper: How historical mortgage rates compare to rates today

The housing crash that started in 2007 and contributed to the global financial crisis continues to weigh heavily on the minds of many economists and consumers. But the factors that led to that crash are not in place today.

“Literally everything is different about today’s housing market dynamics than the conditions that led to the housing crisis,” Sharga said. “That includes a limited supply of homes, high levels of home equity, economic strength, and the strict guidelines mortgage borrowers must meet.”

Mortgages today also look quite a bit different. Gone are the days of the low- to no-doc mortgage and zero-down for anyone and everyone. Today, lenders are looking for buyers willing to put skin in the game. The lowest down payments are typically with VA loans — which offer zero down — and FHA loans — offering down payments as low as 3.5%. Both loans still require stringent income, asset, and employment verification.

With those subprime lending products gone and most mortgage lenders requiring money down, today’s homeowners also have significantly more home equity than those from the early 2000s. Today, the average American has more than $300,000 in home equity.

Divounguy said that in 2007, homeowners who couldn’t afford their monthly payments typically had little home equity.

“When their home couldn’t sell, they couldn’t cut their asking price in order to sell their home,” Divounguy said. “As a result, many walked away from their homes.”

In contrast, today, people who sell have plenty of home equity and can afford to cut sale prices if they need to sell.

“Home equity is still near record highs in most housing markets,” Divounguy said. Most homeowners have extremely low monthly payments due to record-low pandemic mortgage rates. As a result, mortgage delinquency and distressed sales remain low.”

Learn more: 7 ways to build equity in your home

Whether you’re monitoring your home’s value or hoping to buy a new home, you may want to watch for indications of a future housing market crash. An economic shock such as a significant stock market crash or big, prolonged job cuts could signal the start of a housing market crash, Yun said, along with a large increase in the supply of homes.

If unemployment rose rapidly and homeowners couldn’t afford their mortgage payments, they could lose their homes to foreclosure if they couldn’t sell them, Hepp said. A large increase in foreclosures would bring home values down, leading to a potential housing crash.

“Currently, what may be a concern for some markets is the significant increase in non-mortgage related costs, such as property insurance and taxes,” Hepp said. “That may be a bigger concern for households with fixed incomes who may choose to sell their home if they can no longer afford to make their payments. If a significant number of properties were being listed as a result, that could dampen home prices and weaken a housing market. Nevertheless, with housing shortages still outweighing the impact of these additional expenses, a housing crash is not likely, especially a widespread one.”

Sharga suggested that consumers watch their local market conditions, such as whether the population and the job market is growing or declining, along with wages, home sales, and home prices.

“While a national housing crash remains very unlikely, every market is unique, and some are likely to see prices go down even as the national numbers are going up — probably not enough to designate it as a ‘crash,’ but enough to make a difference for some homeowners,” Sharga said.

Learn more: Which is more important, your home price or mortgage rate?

A housing crash is a mixed bag for home buyers. Crashes typically come with other economic undesirables, like job losses. Even if housing prices drop, many Americans could find it more difficult to qualify for a mortgage.

On the other hand, some home buyers could welcome a crash. Lower prices could mean those who have saved and are steadily employed have first dibs on more affordable housing. There’s also a small faction of buyers who think a housing crash of any kind. A December 2024 survey from LendingTree found that 36% of respondents wanted the market to crash for reasons ranging from market stability to lower property taxes. Of those, 8% of respondents feel a crash could help them buy a home.

Read more: Should you buy a house during a recession?

In a housing crash, homeowners who don’t need to sell may prefer to wait until home values regain their strength. Being “underwater” on your mortgage — owing more on your mortgage balance than the value of your home —- as many people were during the previous housing market crash doesn’t immediately impact your finances.

However, if you need to sell your house, you may need to consider more competitive pricing. Buyers in market crashes are looking for bargains, and you may end up with less profit on your home than you anticipated.

If you’re worried about when the housing market will crash again, you can take steps to protect your financial well-being.

Build an emergency fund. Experts recommend having three to six months of expenses in the bank.

Pay down your debt. Try to prioritize high-interest debt, like credit cards.

Buy within your budget. Whether the market crashes or not, it’s always wise to have a mortgage you can comfortably afford.

Make extra mortgage payments. Even a little bit extra each month can help you build equity in your home faster.

Choose a fixed-rate mortgage. Enjoy a steady mortgage payment, and don’t worry if rates increase — a fixed mortgage rate is locked in, regardless of what happens in the real estate market.

Are home prices going to drop in 2025?

Some economists anticipate a drop in home prices in 2025, though not enough to cause a housing market crash. Experts at Zillow forecast home prices to decrease by 2% in 2025.

Is 2025 a good year to buy a house?

The best time to buy a house is when buying makes sense for your unique financial circumstances. For some, that might mean buying a home in 2025 if their income, other debts, and employment support the mortgage payment required for the home they want. For others, 2025 could be the year to pay down debt and build up a down payment so that they qualify for a better mortgage rate in the future.

Is it possible for the housing market to crash again?

Yes, another housing market crash one day is a possibility. However, economists don’t expect a crash in the near future.

This article was edited by Laura Grace Tarpley.

Knowing how much house you can afford is a matter of comparing your financial situation to the factors lenders consider when approving a mortgage application. Those include a steady income, adequate savings for the down payment and closing costs, the amount of debt you carry, and your repayment history.

However, the amount of money you are approved to borrow with a mortgage and how much house you can comfortably afford can be two very different numbers. Lenders want to make loans for the highest dollar they feel comfortable with based on certain elements of a borrower’s personal finances. That's a business decision.

For you, affordability is a quality-of-life calculation. Only you know your comfort level with all of the expenses due each month.

Run the calculations in the home affordability calculator above, then aim lower than the maximum results to give you a financial cushion. Armed with this information, you can determine which type of mortgage you might qualify for — and, more importantly, how much house you can afford.

Knowing your target loan amount will help you determine how much house you can afford. In this formula, you'll use:

Your gross monthly income (before taxes and deductions)

Your monthly debt, such as vehicle and student loans and credit cards

The down payment you have saved

The loan term (e.g., 15-year versus 30-year mortgage)

The interest rate you'll qualify for

Your credit score

A sample mortgage affordability calculation could be:

Gross annual income: $70,000 (or about $5,800 per month)

Your monthly debt: $250

Down payment: $20,000

Loan term: 30 years

Interest rate: 6.5%

Once you factor in payments for private mortgage insurance (PMI), homeowners insurance, and property taxes, such a calculation might yield the result of qualifying for a mortgage up to $213,808, with a home a monthly payment of $2,100.

If you buy a place with a homeowners' association that charges dues, you will also pay a little more each month.

Dig deeper: How much house can you afford with a $70,000 salary?

When you’re determining your house budget, ask yourself two crucial questions: First, how much house can you afford up-front? Second, how much house can you afford in the long-term? The up-front costs consist of your down payment and closing costs, and the longer-term expenses refer to your monthly payments and cash reserves.

Your down payment is the amount you pay in cash when you buy the house. Let’s say you buy a $400,000 home with a $20,000 down payment. Then, you’ll take out a mortgage for the remaining $380,000.

Here are the minimum down payments for the most common types of mortgage loans:

Conforming conventional loan: 3%

Jumbo loan: Usually 10% to 20%

FHA loan: 3.5%

VA loan: 0%

USDA loan: 0%

Use these minimums to determine your true home affordability. For example, if you don’t have 3% of $400,000 — or $12,000 — you probably can’t get a conforming loan, not to mention a jumbo or FHA loan. If you don’t qualify for a USDA or VA loan, then you now know that you should buy a less expensive home. Or save more before buying.

Learn more: What is a down payment, and how does it work?

It’s easy to forget about closing costs when calculating your home-buying budget. The exact amount varies, but you can typically expect to pay 2% to 5% of your loan amount in closing costs.

So, let’s say you want to buy a $400,000 home with a conforming mortgage. You’ll need $12,000 for a down payment and 2% to 5% of the amount you’re borrowing ($388,000), which is $7,760 to $19,400. This means you’ll need a total of $19,760 to $31,400 to realistically afford the house on closing day.

Closing costs vary by mortgage lender but include expenses like a home appraisal, inspection, title search fees, credit report checks, and more.

You probably don't want to spend every last dime on your down payment and closing costs. Then you risk becoming what's known as "house poor." You should still have three to six months of expenses in an emergency fund, and ideally, you’d have some extra money set aside for inevitable house repairs or things you want to buy for the house, like furniture or decorations to make the space feel like yours.

Now that you’re a homeowner, you’ll need to make sure you can comfortably afford the monthly payments. Use our calculator to see how much you can realistically afford. You don’t want to struggle to make your payments each month. In this case, your quality of life could suffer — and you could even end up losing your home in foreclosure.

Learn more: Use our free monthly mortgage payment calculator

In addition to your salary, savings, and repayment history, debt-to-income ratio is one of the most important factors lenders use in determining the home loan you qualify for — and the interest rate you'll be charged.

To start, you'll need three things to calculate your debt-to-income ratio (DTI):

Your monthly gross income, which is before any deductions for benefits, retirement savings, taxes, and the like.

The monthly total of debt payments. That would include the minimum amount due for credit cards, student loan payments, car loans, and other monthly debt payments.

Your estimated monthly mortgage payment.

Next, you'll divide your debt by your income.

A sample calculation:

Monthly debt (including your mortgage): $2,000. Gross monthly income: $5,000. DTI: 2,000 / 5,000 = 0.40.

Another clue to examining home affordability is the 28/36 rule. Lenders use this to zero in on what you currently owe and how a mortgage will impact that debt load. It can help you determine what percentage of your income should go to a mortgage.

28% is the maximum total of your housing expenses. This is known as the front-end debt-to-income ratio, which is your mortgage, property taxes, and homeowners' insurance. Housing costs / income = front-end ratio.

You can reverse the calculation and multiply your income by 0.28 to determine a target mortgage payment.

36% is the limit to your total debt, including the mortgage and existing loans and credit balances. It's called the back-end debt-to-income ratio. All debt / income = back-end ratio.

Tip: Mortgage lenders have flexibility for well-qualified buyers. If you have a decent down payment and a credit score on the high end, they might stretch your back-end ratio as high as the low 40s. However, you will likely also pay a higher interest rate.

Read more: The best mortgage lenders for first-time home buyers

Many lenders allow you to get a conventional loan with just 3% down. They usually prefer a DTI ratio of 41% or less, but you might qualify with a ratio as high as 50%. A conventional loan is a great option if you can afford a 20% down payment, because then you won't have to pay for PMI.

You can get an FHA loan with a down payment as low as 3.5%, as long as you have a minimum 580 credit score. You'll also need a DTI of 43% or lower.

It's important to factor in the cost of FHA mortgage insurance premiums (MIPs). Unlike conventional loans, you cannot avoid MIPs by making a large down payment. Except in special circumstances, you'll likely pay MIPs for the life of the loan — keep this in mind when thinking about monthly mortgage payments.

The U.S. Department of Veterans Affairs doesn't require a down payment on VA loans. Some VA mortgage lenders might ask for a down payment, particularly if other parts of your financial profile aren't super strong. Many lenders also prefer a DTI ratio of 50% or lower.

A zero-down-payment mortgage can be a great way to get your foot in the door as a homeowner, especially as a first-time home buyer. Just remember that the lower your down payment, the higher your monthly payment. While it may be easier to afford a mortgage up-front with 0% down, it could make finances more difficult in the long run.

The U.S. Department of Agriculture also doesn't require a down payment. It also doesn't set a minimum DTI ratio requirement, though many lenders prefer your ratio to be 41% or lower for a USDA loan.

As with VA loans, remember that a 0% down payment makes homeownership more affordable at first, but it results in higher monthly payments. Both are crucial factors to consider when determining how much home you can afford.

You're buying a house. The lender is selling a mortgage. With that perspective, it's easy to understand that only you can determine true affordability. You have to make the monthly home loan payments. And you may want to travel, buy new furniture, buy a new car, save for the future — or a hundred other things.

So, a lender might approve you for a loan to buy too much house with a too-large payment. Your sense of what you can really afford may convince you to buy a house at a more reasonable purchase price with lower payments.

That's being in control of home affordability.

Learn more:

What is the monthly payment on a $600,000 mortgage?

How much is a mortgage on a $500,000 house?

What is the monthly payment on a $400,000 mortgage?

How much is the monthly payment on a $300,000 mortgage?

What is the monthly payment on a $200,000 mortgage?

Having a healthy savings stash helps build your home purchasing power. That means you can make a decent down payment and show that money is set aside for not only your housing payment but all of your monthly debt, including a car payment, credit card debt, and living expenses. A good credit report not only impacts how much home you can afford but also helps you qualify for a lower interest rate.

In addition to the mortgage loan payment, insurance premiums, and taxes, you’ll want to consider things like HOA fees, and if you put less than 20% down on a conventional loan, you’ll likely have to pay private mortgage insurance. There are also everyday expenses to factor in, such as transportation costs, childcare, or furniture for your new home.

One big clue to knowing you are in a good place financially to buy a home is when your current monthly expenses are well in hand. That means you have a comfortable household income, are well on top of credit card payments, and have set aside some cash for unexpected expenses. Your total monthly debt is within the DTI parameters we mentioned above. And your annual income is steady and perhaps even expected to grow in the years ahead.

Debt is a major part of home affordability. Your debt-to-income ratio is a key factor that lenders look at. Using a home affordability mortgage calculator can give you a clue as to how your debt impacts your homeownership qualifications.

It's overwhelming to be a first-time home buyer. Buying a house in 2025 takes a series of savvy financial moves, and you'll need a mortgage lender who can be a true partner in the process. Not a knock-it-out, "Who's next in line?" provider, but a lender with deep resources and loan options that can make your homeownership dream come true.

Yahoo Finance has analyzed leading mortgage lenders, considering important aspects of the loan process, such as average mortgage rates and total costs, and used this data to create the ultimate "best of" list for August 2025 — without conflicts of interest or compromise.

The Yahoo view: Truist distinguishes itself with down payment assistance and lender credits, among other first-time home buyer advantages. However, it has a below-average score for customer satisfaction.

Read our full Truist mortgage review

Key benefits

A Community Homeownership Incentive Program offers low or no down payments, lender credits, and no mortgage insurance to eligible borrowers in qualifying areas.

Medical professionals may qualify for lower down payments, waived mortgage insurance, and the exclusion of student loans from debt-to-income requirements with Truist mortgages.

Need to know

Published mortgage rates default to one discount point to show a more favorable interest rate but can be adjusted to zero points.

Scores below the average for customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.

The Yahoo view: NFCU offers several distinctive benefits, including interest rate protection on VA-backed mortgages for active and former military members. Although it has our highest star rating, it is specifically best for military-affiliated first-time home buyers.

Read our full Navy Federal Credit Union mortgage review

Key benefits

The Special Freedom Lock allows an interest rate reduction of up to 0.50% if mortgage rates move lower before your loan closing — just one reason why NFCU is on Yahoo Finance's list of the best VA lenders.

The No-Refi Rate Drop allows you to tap a lower interest rate six months or later after closing — for a $250 fee but without changing your loan terms or taking on additional closing costs as you would with a refinance.

A rate guarantee states that Navy Federal will match a better mortgage rate offered by a competing lender or pay you $1,000.

Military Choice loans allow benefits similar to VA mortgages to current and former service members without further entitlements.

Buy your home through a Navy Federal real estate agent partner and receive $400 or more cash back.

Need to know

Navy Federal Credit Union home loans are available to members only. Eligibility includes active duty or former members of the armed forces, Department of Defense or National Guard and family or household members.

Ranks above the average of all the lenders considered in the latest J.D. Power Mortgage Origination Satisfaction Study.

The Yahoo view: TD Bank excels in home loan selection with the broad selection of products typical of a depository institution. However, its services are only available in just over a dozen states.

Read our full TD Bank mortgage review

Key benefits

TD Bank mortgage punches above its weight. Only a short list of mortgage loans is unavailable.

Offers a comprehensive selection of educational resources for borrowers, including calculators.

Fee discounts are available to existing TD customers.

Need to know

Individualized rates are available by filling out a simple online form.

Serves 15 states (CT, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT) plus Washington, D.C.

Dig deeper: How to choose a mortgage lender

The Yahoo view: Chase Bank offers a wide assortment of home-buying tools, including nearly a dozen calculators, plus videos, checklists, FAQs, and more.

Read our full Chase mortgage review

Key benefits

Chase has an abundance of online learning resources, which are perfect for guiding a first-time home buyer through a complicated process.

Chase offers a $5,000 guarantee to close a home loan as quickly as in three weeks under specific guidelines.

VA loans may be eligible for a credit of up to $2,000, which you can apply to closing costs.

Need to know

Chase has an above-average rating for customer satisfaction, according to the 2024 J.D. Power study.

The conventional loan interest rates on the Chase website are enhanced with strict credit standards, including 20% to 25% down payments, one discount point, and borrowers with "excellent" credit. In other words, the rate you earn could be much different.

The Yahoo view: Better offers several home-buying services, including rapid loan approval, insurance, real estate attorneys, settlement services, and more, as part of a consolidated digital experience — making it our top online mortgage lender.

Read our full Better Mortgage review

Key benefits

A "One Day Mortgage" offer promises a loan commitment within 24 hours of submitting paperwork and a rate lock.

Better Mortgage claims to close loans "17 days faster than the industry average."

A full-service digital experience includes loans, insurance, real estate attorneys, and settlement services.

Need to know

Published interest rates are shown for borrowers with a 20% down payment, who pay closing costs with cash, have a DTI below 35%, and a credit score of 760 or higher.

Mortgage rates are also lowered with two or more discount points.

The Yahoo view: Best-in-class for customer satisfaction, Bank of America also offers a full suite of loan products.

Read our full Bank of America mortgage review

Key benefits

Bank of America is near the top of customer satisfaction rankings in the latest J.D. Power survey.

Offers grants up to $7,500 in closing costs and down payment assistance up to $10,000 for qualified buyers in many, but not all, states.

Existing customers may qualify for an origination fee or interest rate deduction. You'll likely have to sign up to draft your mortgage payments from an account to qualify.

A home buyer program for medical professionals allows borrowers to make lower down payments and exclude student loans from debt limits. Residents and fellows can also close on a loan 90 days before starting a new position.

Need to know

Bank of America's Real Estate Center features home listings, including existing and new construction properties — as well as bank-owned houses.

The Yahoo view: Pennymac is a major lender for loans insured by the FHA (Federal Housing Administration) and is well-equipped to guide first-time homebuyers through the government loan process.

Read our full Pennymac mortgage review

Key benefits

Pennymac is the second-largest FHA lender by loan volume in the nation — and is rated by Yahoo Finance as the best overall FHA lender.

Offers a rate buydown that lowers your interest rate by 1% for one year.

Show sellers you are a serious and qualified buyer with Pennymac's BuyerReady Certification. You will also receive a $1,000 credit to apply to your closing costs.

Use a real estate agent endorsed by Pennymac and get from $350 to $9,500 cash after closing.

Need to know

Pennymac has a well-below-average rating for customer satisfaction, according to the 2024 J.D. Power Mortgage Origination Satisfaction Study.

The Yahoo view: Citibank is a legacy mortgage loan lender with grants up to $7,500 to apply to closing costs.

Read our full Citibank mortgage review

Key benefits

Citi offers a 3% down payment program with no private mortgage insurance (PMI) requirement to borrowers in specified U.S. cities.

Citi’s Lender Paid Assistance Program can cover up to $7,500 in closing costs to qualified buyers.

Need to know

Advertised mortgage rates include substantial discount points and undisclosed credit score requirements.

A Yahoo Finance analysis of HMDA data revealed that Citi charged well-below-median mortgage interest rates in 2023 with average loan costs.

The Yahoo view: An early-mover in digital mortgages, Rate (previously Guaranteed Rate) offers face-to-face service in many markets but is rated well below J.D. Power’s average in customer satisfaction.

Read our full Rate (Guaranteed Rate) mortgage review

Key benefits

For a personal service option, Rate has hundreds of branch locations across the nation.

A "Same Day Mortgage" promises loan approval — but not loan funding — within 24 hours of locking an interest rate and submitting financial documents.

Offers non-qualified mortgages for self-employed borrowers or those who want to qualify using alternative credit standards.

Need to know

Advertised rates factor in more than one discount point, are based on a 20% down payment, and a FICO score well above the national average.

Rate scores well below average in customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.

Read more: How to get a mortgage when you're self-employed

The Yahoo view: Has made a commitment to offer down payment assistance and closing costs credits to advance homeownership for minorities.

Read our full U.S. Bank mortgage review

Key benefits

Has committed $100 million over five years to offer up to $12,500 in down payment assistance and up to an additional $5,000 in a lender fee credit to advance homeownership for minority families.

Existing U.S. Bank customers may be eligible for a credit against closing costs up to $1,000.

A prequalification process is free, "takes five minutes," and does not impact on your credit.

Need to know

A loan application can be made in a loan officer's office, by phone or online.

U.S. Bank's mortgage rates, as published on its website, look appealing. However, the conventional loan rates shown require a down payment of 25% and a FICO score of 740 or better. That's well above the national average credit score of 715.

Many mortgage lenders offer conventional loans backed by Fannie Mae. With the HomeReady program, you only need a 3% down payment and 620 credit score. You also might qualify with a debt-to-income ratio as high as 50%.

You must finish a home-buyer education course to qualify for this program, which is often useful for first-time buyers.

Conventional loans backed by Freddie Mac also require a 3% down payment and an online home-buyer education course. The main differences from the HomeReady program are that Home Possible loans require a 660 credit score and a 45% DTI ratio for buying a house.

FHA loans can be great for first-time home buyers because you can qualify with a 580 credit score and 3.5% down payment. (You can even get an FHA loan with a score as low as 500, but you'll need 10% down in this case.)

VA loans are for eligible active military personnel, veterans, and their families. They're great mortgages for getting your foot in the door of homeownership because you don't need a down payment. The U.S. Department of Veterans Affairs also doesn't set a minimum credit score, so you can shop for lenders that accept low scores if that's an issue.

You also don't need a down payment for USDA loans. These mortgages are for low-to-moderate-income borrowers buying in rural and suburban areas. As with VA loans, the U.S. Department of Agriculture doesn't set a minimum credit score, so the credit score needed will depend on the lender.

We seriously considered the following mortgage lenders with first-time home buyer loans for our best-of list, but they weren’t quite as strong as our top picks:

American Pacific Mortgage

AmeriHome Mortgage

AmeriSave Mortgage

BMO mortgage

Cardinal Financial mortgage

Carrington Mortgage Services

Citizens Bank mortgage

CMG Financial mortgage

CrossCountry Mortgage

Embrace Home Loans

Fairway Independent Mortgage

Fifth Third Bank mortgage

Flagstar Bank mortgage

Freedom Mortgage

Guild Mortgage

Huntington mortgage

loanDepot

Movement Mortgage

Mr. Cooper mortgage

New American Funding

Newrez mortgage

PenFed Credit Union mortgage

PHH Mortgage

Planet Home Lending

PNC Bank mortgage

Prosperity Home Mortgage

Regions Bank mortgage

Rocket Mortgage

SoFi mortgage

Third Federal Savings & Loan mortgage

USAA mortgage

Veterans United

Wells Fargo mortgage

An FHA loan is often the best type of loan for first-time home buyers because you only need a 580 credit score and a 3.5% down payment (or a 500 credit score with 10% down). It also allows borrowers with more debt to buy a home than many other types of mortgages. These features are great for first-time buyers who may not have much money saved or haven't had time to build up their credit yet. However, a conventional loan could be good if you're a first-time buyer with a strong credit score and lower debt levels, because many lenders only require 3% down.

First-time home buyers should look into three government-backed home loans: FHA, VA, and USDA loans. FHA loans are geared toward people with higher debt levels and lower credit scores. VA loans are for military-affiliated buyers who don't have any money for a down payment. USDA loans are for lower-income homeowners buying in rural areas and also don't have any money for a down payment. But conventional loans are still great mortgage options for first-time buyers with 620 credit scores and 3% down.

The best bank (or mortgage lender) will depend on your situation, but we chose Truist Bank as the best lender for first-time home buyers overall. It offers benefits for first-time buyers such as down payment assistance and lender credits.

You can put down as little as 0% as a first-time buyer getting a VA loan or USDA loan. You can also put down 3.5% for an FHA loan. Depending on the lender and how strong your finances are, you may be able to put down as little as 3% with conventional mortgages.

A 30-year mortgage term is usually best for first-time buyers. All common types of mortgage loans offer a 30-year option, and it has lower monthly payments than, say, a 15-year mortgage.

As a first-time home buyer, a 620 credit score is preferable. You can qualify for a conventional mortgage with most lenders with a 620 score. However, FHA loans are often good deals for first-time buyers who might not have had time to build strong credit yet — FHA loans only require a 580 score.

An FHA mortgage is usually the easiest type of loan to get approved for because it has relatively lenient credit score requirements. But if you're affiliated with the military and are eligible for a VA loan, you'll likely be approved because the VA doesn't set a minimum credit score — the requirement varies by mortgage lender.

Methodology:

Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.

This article was edited by Laura Grace Tarpley.