Homebuyers in These 15 States Get the Worst Mortgage Rates

Homeownership is one of the common ways to build wealth . If you’re a first-time buyer, you want to get the lowest mortgage rate possible. You are improving your credit, saving for your down payment, and considering what type of mortgage to get.

But did you know that where you live can impact your mortgage rate?

Construction Coverage analyzed data from the 2023 Home Mortgage Disclosure Act, released by the Federal Financial Institutions Examination Council, to look at which states have the highest and lowest percentages of fixed-rate mortgage holders with rates less than 7% as of 2023.

If you’re in a state like North Dakota, Alaska, or Massachusetts, there’s a good chance you’re sitting pretty with a mortgage rate below 7%. But if you’re in one of these 15 states with the worst mortgage rates, you probably have your eye on refinancing as soon as rates drop.

1. South Carolina

Planning to move to the Palmetto State? The median sold price for a house in South Carolina was $383,600 in July, which is lower than the national median, but it’s still not good news when only 60.9% of mortgages are under 7%.

2. Ohio

You might have your eye on livable Ohio cities like Cleveland, Cincinnati, or Toledo, but don’t expect to get a surprisingly low mortgage rate in the Buckeye State. Only 59.8% of mortgages are under 7% in Ohio.

3. West Virginia

The median sold price in West Virginia in July was $244,100, which makes it one of the more affordable states in the country. But you might end up paying more than you would expect because only 58.7% of mortgage rates are under 7%.

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4. Kentucky

The Bluegrass State may have rolling hills, horses, and bourbon, but one thing it doesn’t have is low mortgage rates. Whether you’re house-hunting in Lexington or Louisville, only 58.6% of mortgage rates in Kentucky are under 7%.

5. Missouri

The median sale price in Missouri was $273,400 in July, which is less than the national median sale price of $438,837. But the Show-Me State is showing us high interest rates, with only 57.5% of mortgage rates coming in under 7%.

6. New Hampshire

In New Hampshire, only 57.3% of mortgage rates are under 7%. Combine that with the median sale price of $499,600, and New Hampshire residents are paying a pretty penny to buy a new house in their state.

7. Indiana

The median sale price in Indiana is only $242,500, which helps balance out their mortgage rates just a little. In the Hoosier State, only 56.1% of mortgage rates are under 7%.

8. Michigan

Only 55.8% of mortgage rates in Michigan are under 7%. Across the state, the median sale price was $276,100 in July, but the monthly payment can increase quickly when you consider a sky-high mortgage rate.

9. Arkansas

If you’re house-hunting in Arkansas, the median sale price in July was $258,100, which may sound appealing until you consider the mortgage rate. Only 54.9% of mortgage rates in the state of Arkansas are under 7%.

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10. Alabama

Stars fell on Alabama, but they didn’t fall on their mortgage rates. Only 54.5% of mortgage rates in Alabama are under 7%, which means you’re going to pay more per month when you’re house-hunting in Birmingham, Mobile, or anywhere else across the state.

11. Oklahoma

The median sale price for a home in Oklahoma was $249,700, which makes it one of the less expensive places to buy a house in the United States. But you’re not getting such a deal when you consider that only 54% of mortgage rates are under 7%.

12. Maine

People love Maine summers, which is probably why the median sale price in the state was $415,600 in July. That price starts to creep even higher when you learn that only 53.1% of mortgage rates in the Pine Tree State are under 7%.

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13. Louisiana

Whether you’re house-hunting in New Orleans or somewhere along the bayou, you shouldn’t expect to find a deal on a mortgage rate in Louisiana. Only 53% of mortgage rates in the Sportsman’s Paradise are under 7%.

14. New Mexico

The median sale price of a home in New Mexico was $373,300 in July. Pair that with a sky-high interest rate, and your monthly payment starts to look less-than-friendly. Unfortunately, only 50.3% of interest rates in New Mexico are under 7%.

15. Mississippi

There’s a big jump to the state with the worst mortgage rates, and that winner (loser?) is Mississippi. Only 42.6% of mortgage rates are under 7% in the Magnolia State. That means nearly 60% of homeowners are paying more than 7% each month.

Bottom line

While you can’t control the average mortgage rates in the state where you live, there are other ways to help you pay your mortgage .

To lower your rate, you can buy down your mortgage rate, often lowering it by a point or more. This is a one-time fee that you’ll pay at closing, but the amount that you’ll pay monthly will be lower thanks to a lower mortgage rate.

You might also consider a 30-year fixed rate mortgage instead of a 15-year mortgage. While you’ll be paying more interest over time, your monthly payments will be lower.

For those who have saved a significant amount for buying a home but are still feeling anxious about the monthly payment, these can be helpful tactics.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).