Indiana Mortgage and Refinance Rates

Current mortgage rates in Indiana

As of Thursday, January 16, 2025, current interest rates in Indiana are 7.19% for a 30-year fixed mortgage and 6.48% for a 15-year fixed mortgage.

As of October 2024, the median sales price of a home in Indiana is $257,050, according to ATTOM. That’s nearly a 12 percent increase year-over-year. Given that median down payments have jumped 42 percent in the same period, affordability is still a challenge for many Indiana residents, as it is for aspiring homeowners nationwide.

Refinance rates in Indiana

For the second half of 2024, mortgage refinance rates have mostly bounced around the 6 to 7 percent range. Now might be an opportunity for those who locked in a higher interest rate last year — when rates peaked around 8 percent in October — to refinance to a lower rate. But for those who are still holding on to a lower interest rate, it may not make sense to refinance now if doing so will bring a higher rate and higher monthly payments.

However, many Indiana homeowners have more tappable equity: The average mortgage-holder in the U.S. has gained $5,700 in equity from the prior year as of the third quarter of 2024, according to CoreLogic. With a cash-out mortgage refinance, you could take advantage of this asset to help further your financial goals.

Indiana mortgage rate trends

While mortgage rates are difficult to predict, experts do not anticipate that rates will drop dramatically from their current level in the near future. The trifecta of a robust economy, inflation concerns and worries about a rising federal deficit appears to be keeping the pressure on mortgage rates. While they briefly lowered to 6.2 percent in September, by the end of November rates were approaching the 7 percent territory again.

National mortgage rates by loan type

Mortgage statistics for Indiana

• Most affordable counties (based on median home value): Sullivan, Blackford, Vermillion, Jay, and Randolph 
• Median home sales price, October 2024: $257,050
• Median home value, October 2024: $244,900
• Median down payment, October 2024: $44,000
• Homeownership rate Q3 2024: 71.4%

Sources: ATTOM, U.S. Census Bureau

Mortgage options in Indiana

There have been 147,843 residential properties sold in Indiana over the past 12 months, as of October 2024, according to ATTOM. If you're hoping to join the ranks of these homebuyers, there are various types of mortgages available, including: 

• Indiana conventional mortgages: Conventional loans can have either a fixed or adjustable rate and come with a minimum down payment requirement of 3 percent. To qualify, you'll typically need at least a 620 credit score. If you put down less than 20 percent, you'll need to pay private mortgage insurance (PMI).
• Indiana FHA loans: If your credit is too low for a conventional loan, you might consider a loan insured by the Federal Housing Administration (FHA). You can get an FHA loan with a credit score as low as 580 with a 3.5 percent down payment or a score as low as 500 with a 10 percent down payment.
• Indiana VA loans: Prospective homebuyers who are veterans, active members of the military or a surviving spouse may qualify for a mortgage from the Department of Veterans Affairs (VA loan). These mortgages do not require a down payment or mortgage insurance, but homebuyers must pay a funding fee.
• Indiana USDA loans: If you're home shopping in a rural part of Indiana, a loan guaranteed by the U.S. Department of Agriculture (USDA) may be a good fit. Like VA loans, USDA loans do not require a down payment, but you’ll need to purchase a home in a designated rural area and meet that area’s income limits.

First-time homebuyer programs in Indiana

Qualifying individuals and families in Indiana may have access to a variety of national first-time homebuyer programs and educational opportunities to help them navigate the homebuying process — but there are also first-time homebuyer programs available specifically to residents of Indiana.

• IHCDA Step Down: The Step Down program is an interest-only mortgage offered through the Indiana Housing and Community Development Authority (IHCDA), and partnering lenders. It comes as either an FHA or conventional 30-year fixed-rate mortgage. To take advantage of it, you must be a first-time homebuyer or be buying in a targeted area. In addition, the home must be a primary residence in Indiana. Additional requirements include meeting area-specific income and purchase limits and the home having a purchase price that does not exceed the appraised value. 
• IHCDA First Step: The IHCDA First Step program is a down payment assistance (DPA) program that provides up to 6 percent of the purchase price in the form of a non-forgivable loan. It must be used along with a 30-year, fixed-rate loan — either an FHA loan or a conventional loan. To qualify, you must be a first-time homebuyer and the home must be a primary residence in Indiana. In addition, homebuyers must meet area-specific income and purchase limits and the home's purchase price cannot exceed the appraised value. 
• IHCDA Next Home: Next Home is another option from the IHCDA to help make your home purchase more affordable. Although, it’s open to anyone, not just first-time homebuyers. The down payment assistance is smaller compared to the First Step program: only up to 3.5 percent of the purchase price. The borrower requirements, income limits and property cost limits, however, are the same as the First Step program. 
• Mortgage credit certificate (MCC): Indiana first-time homebuyers can also save through a mortgage credit certificate (MCC), administered locally by the IHCDA, which converts a portion of their mortgage interest paid into a federal tax credit. The maximum tax credit each year is $2,000. The MCC is available to low- to moderate-income first-time homebuyers who work with an approved mortgage lender. Minimum credit scores, household income limits and purchase price limits apply.

How to find the best mortgage rate in Indiana for you

• Step 1: Strengthen your credit score - Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your credit score if needed.
• Step 2: Determine your budget - To find the right mortgage, you’ll need a good handle on how much house you can afford.
• Step 3: Know your mortgage options - There are a few different types of mortgages.
• Step 4: Compare rates and terms from several lenders - Rate-shop with at least three different banks or mortgage companies.
• Step 5: Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Additional Indiana mortgage resources

• Closing costs in Indiana: Learn who pays for what when sealing the deal. 
• Indiana conforming and FHA loan limits by county: Learn the conforming loan limit for your city or town.
• Buying a house in Indianapolis: Learn the real estate scene in Indiana’s largest town.
• Best homeowners insurance in Indiana: Compare policies from a variety of providers.
• Indiana mortgage lenders: Compare loans and offers around the state.

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

Read more from Jeff Ostrowski

Edited by: Laurie Richards, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English.

Read more from Laurie Richards