Alabama Mortgage and Refinance Rates
Current mortgage rates in Alabama
As of Tuesday, April 15, 2025, current interest rates in Alabama are 6.81% for a 30-year fixed mortgage and 6.16% for a 15-year fixed mortgage. Refinance rates are typically slightly higher than purchase rates.
While mortgage rates are difficult to predict, many experts agree they’ll continue to decrease, but modestly, remaining above 6 percent for the rest of the year and into 2026.
Refinance rates in Alabama
Refinance rates in Alabama, and across the country, have increased from their COVID-era lows and are currently holding in the 6 to 7 percent range. If you took out your mortgage within the last few years and have a rate above 7 percent, it may make sense to refinance now. However, if you have one of the approximately three-quarters of outstanding mortgages with a rate below 5 percent, you probably won’t want to refinance anytime soon.
That said, while refinance rates are still relatively high, property values have been on the rise across the country. In the fourth quarter of 2024, the average mortgageholder gained $4,100 in equity over the prior year, according to property data firm Cotality. Refinancing may not get you a lower rate, but a cash-out refinance could help you fund larger expenses more cheaply than other forms of borrowing.
National mortgage rates by loan type
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 6.97% | 7.02% |
| 15-Year Fixed Rate | 6.20% | 6.27% |
| 30-Year Fixed Rate FHA | 6.91% | 6.96% |
| 30-Year Fixed Rate VA | 6.96% | 7.01% |
| 30-Year Fixed Rate Jumbo | 6.96% | 7.01% |
Rates as of Tuesday, April 15, 2025 at 6:30 AM
Alabama housing market statistics and trends
- Median home sales price, Jan. 2025: $230,000
- Median home value, Feb. 2025: $231,709
- Median down payment, Jan. 2025: $27,500
- Median days on market, Feb. 2025: 73
- Percentage of homes sold above list price, Feb. 2025: 15.9%
- Percentage of homes with price drops, Feb. 2025: 22.9%
- Homeownership rate, Q4 2024: 71.2%
Sources: ATTOM, Redfin, U.S. Census Bureau
Mortgage options in Alabama
There are a variety of mortgage options available to homebuyers in Alabama:
- Alabama conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio of no more than 45 percent. With a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) as well.
- Alabama FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a credit score of at least 580, you can qualify for a down payment as low as 3.5 percent.
- Alabama VA loans: If you’re a veteran or an active-duty member of the military, you might qualify for a mortgage guaranteed by the Department of Veterans Affairs (VA). VA loans don’t typically require a down payment, and you won’t have to pay for mortgage insurance, but you will need to pay a funding fee, which ranges from 1.25 percent to 3.3 percent of the loan amount.
- Alabama USDA loans: If you’re buying a rural property in Alabama, you might be eligible for a mortgage guaranteed by the U.S. Department of Agriculture (USDA). These loans don’t require a down payment, but you’ll need to purchase in a designated rural area and meet the area’s income limits.
First-time homebuyer programs in Alabama
The Alabama Housing Finance Authority (AHFA) offers several first-time homebuyer programs in Alabama, including:
- Step Up: Step Up packages a 30-year, fixed-rate first mortgage with a second mortgage for up to $10,000, which can be used toward a down payment. To qualify, you must earn $159,200 or less, have a minimum credit score of 640 and a debt-to-income (DTI) ratio no higher than 45 percent.
- Affordable Income Subsidy Grant: AHFA’s Affordable Income Subsidy Grant helps finance closing costs. To qualify for a grant that equals 1 percent of your mortgage, your income must not exceed 50 percent of the area median income where you’re buying; for a half-percent grant, your income must not exceed 80 percent.
How to find the best mortgage rate in Alabama for you
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Step 1: Strengthen your credit score
Before looking for a lender and applying for a loan, review your credit history and take steps to improve your score, if needed.
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Step 2: Determine your budget
Have a good understanding of how much house you can afford before you go shopping.
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Step 3: Know your mortgage options
Your budget and financial situation can help you decide whether a conventional or government-backed loan is the best fit, and whether you might want down payment assistance.
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Step 4: Compare rates and terms from several lenders
Be sure to read reviews of different lenders in Alabama to figure out which might suit your needs. Then rate-shop with at least three to get the best deal.
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Step 5: Get preapproved for a mortgage
Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation. Plus, it will show sellers you’re serious when you make an offer.
Additional Alabama mortgage resources
- Alabama loan limits by county: Learn the conforming loan limit for your city or town.
- Homeowners insurance in Alabama: Compare policies from a variety of providers.
- Closing costs in Alabama: Learn how much you can expect to pay in closing costs.
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.
Edited by: Alice Holbrook, Editor, Home Lending
I have been a writer and editor in the personal finance space for more than a decade, with more than three of those focused on homebuying and homeownership. I’ve had work appear in outlets including Newsweek, The Washington Post, The Associated Press, USA Today and MarketWatch.