Illinois Mortgage and Refinance Rates

Current mortgage rates in Illinois

As of Saturday, December 21, 2024, current interest rates in Illinois are 7.04% for a 30-year fixed mortgage and 6.42% for a 15-year fixed mortgage. Before you buy, know your options and compare as many mortgage offers as you can to find the best deal.

The median sales price of a home in The Prairie State is $305,000 as of June 2024, according to ATTOM. That figure represents a 5.2 percent increase year-over-year. This gain, and the fact that the number of homes sold in the state actually fell by 19.6 percent compared to the year prior, suggests that affordability is a challenge for Illinois residents and aspiring homeowners nationwide.

Refinance rates in Illinois

While mortgage refinance rates have more than doubled since the pandemic — but are now easing — many Illinois homeowners have much more tappable equity now: The average mortgage-holder has gained $25,000 in the past year as of the second 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.

Illinois mortgage rate trends

While mortgage rates are difficult to predict, the current consensus is for rates to remain well above historical lows for the foreseeable future, including in Illinois. That may sound bleak, but there is some good news: Average mortgage rates in Illinois — and the rest of the country — have been falling since mid-July. They could sink even further with the Fed’s upcoming rate cuts (but don’t expect them to plummet). This could encourage sidelined homebuyers to get back out on the market.

National mortgage rates by loan type

Mortgage statistics for Illinois

While home prices have risen, home sales actually fell in Illinois over the past year. Here are some other state stats:

• Most popular cities: Chicago, Rockford, Naperville, Aurora, Springfield
• Most affordable counties (based on median home value): Clay, Edwards, Massac, Pulaski, Richland, Saline
• Median home value, June 2024: $286,413
• Median home sales price, June 2024: $305,000
• Median down payment, June 2024: $40,000
• Homeownership rate, Q4 2023: 67.8%

Sources: ATTOM, U.S. Census Bureau

Mortgage options in Illinois

If you’re looking to get a mortgage in Illinois, there are several options depending on what you qualify for:

• Illinois conventional mortgages: To be eligible for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio of no more than 43 percent. If you make a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI), as well.
• Illinois 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 down payment of at least 3.5 percent, you could qualify for an FHA loan with a credit score as low as 580.
• Illinois VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage backed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which starts at 1.25 percent for homebuyers who haven’t obtained a VA loan in the past.

First-time homebuyer programs in Illinois

If you’d like to become a homeowner in Illinois, the state can help make it easier and more affordable. The Illinois Housing Development Authority (IHDA) offers several Illinois first-time homebuyer assistance programs, including fixed-interest mortgages and down payment assistance loans through its Access Mortgage initiative. This includes:

• IHDA Access Forgivable Mortgage: The IHDA Access Forgivable Mortgage program offers fixed-rate 30-year mortgages via participating lenders. To find the best mortgage lender, the IHDA website has a tool to help you locate one locally. Through this program, you can get 4 percent of the home purchase price, up to $6,000, as a closing cost and down payment assistance loan. You don’t need to pay this loan back as long as you live in the home for at least 10 years. Qualifying for the IHDA Access Forgivable Mortgage requires a minimum 640 credit score. You also need to meet certain income and purchase price limits that vary by county.
• IHDA Access Deferred Mortgage: The IHDA Access Deferred Mortgage program offers a 30-year fixed-rate mortgage through an FHA, VA, USDA or HFA Preferred (conventional) loan. You can also take out a loan worth 5 percent of the home’s purchase price, up to $7,500, to help you pay for closing costs and the down payment. This is an interest-free loan, and you don’t need to pay it back until the end of your loan term, or when you sell your home or refinance your mortgage. To qualify, you need a credit score of at least 640. The same income and purchase price limits as with the IHDA Access Forgivable Mortgage apply.
• IHDA Access Repayable Mortgage: The IHDA Access Repayable Mortgage program offers a 30-year fixed-rate mortgage. Your loan options include an FHA, VA, USDA or HFA Preferred (conventional) loan. You also can get a down payment and closing cost assistance loan worth 10 percent of the purchase price, up to $10,000. To qualify, you’ll need to meet the same program requirements as the Deferred and Forgivable program options.

How to find the best mortgage rate in Illinois for you

• Step 1: Strengthen your credit score - Before you start exploring mortgage rates in Chicago, Rockford or wherever you hope to call home in The Prairie State, give your finances a checkup. If your credit score needs work, taking the time to improve it could help you secure lower mortgage interest rates in Illinois.
• Step 2: Determine your budget - To find the right mortgage in Illinois, 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 in Illinois, including conventional, FHA and VA loans.
• Step 4: Compare rates and terms from several lenders - To get the best Illinois mortgage rates, it’s a good idea to shop around. Try to get rates from 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 Illinois mortgage resources

• Illinois loan limits by county: Learn the conforming loan limit for your city or town.
• Illinois mortgage lenders: Compare rates and terms from lenders all around the state.
• How to buy a house in Illinois: Learn the ins and outs of homeownership in The Prairie State.
• Illinois housing market: Discover everything you need to know about the local real estate scene.
• Best homeowners insurance companies in Illinois: Compare policies from a variety of providers.

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