Iowa Mortgage and Refinance Rates

Current mortgage rates in Iowa

As of Friday, February 21, 2025, current interest rates in Iowa are 6.88% for a 30-year fixed mortgage and 6.13% for a 15-year fixed mortgage.

Refinance rates in Iowa

Refinance rates are still much higher than the 3 percent rates that the pandemic brought. However, the rise in home values has increased the equity stakes many homeowners have. You might consider using that home equity to do a cash-out refinance on your Iowa home to pay for renovations or other expenses.

Iowa 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 Iowa. Many housing economists predict that rates will settle within the 6 to 7 percent range for most of 2025. Home prices remain high in the state as well, with the December 2024 median home sales price of $230,300 up 4.6 percent from the year prior, according to Redfin data.

National mortgage rates by loan type

Mortgage statistics for Iowa

• Most affordable counties (Dec. 2024): Appanoose, Decatur, Emmet, Montgomery, Pocahontas, Taylor, Wapello, Wayne, Wright
• Median home sales price (Dec. 2024): $230,300
• Median down payment (Oct. 2024): $25,000
• Average home value (Dec. 2024): $215,153
• Homeownership rate (Q3 2024): 70.5%

Sources: ATTOM, Redfin, Zillow, U.S. Census Bureau

Mortgage options in Iowa

Like elsewhere in the U.S., there are various mortgage options in Iowa to suit a range of needs and financial circumstances. Here are some of the most common:

• Iowa 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) premiums, as well.
• Iowa 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 this type of loan with a credit score as low as 580.
• Iowa VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage guaranteed 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 ranges from 1.25 percent to 2.15 percent.
• Iowa USDA loans: If you’re buying a rural property in Iowa, you might be eligible for a mortgage guaranteed by the U.S. Department of Agriculture (USDA). USDA 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 Iowa

The state of Iowa’s first-time homebuyer program is operated by the Iowa Finance Authority (IFA) and provides buyers assistance with the down payment and closing costs. 

FirstHome Program

Called the FirstHome program, qualified homebuyers can obtain a mortgage with a below-market interest rate as well as either a $2,500 grant to put toward the down payment and closing costs or a 2nd Loan of up to 5 percent of the home's sales price.

To be eligible, you’ll need to be within household income limits, which depend on the home's location and your household size. The maximum purchase price limit is $510,000, unless you’re buying in a targeted area, where the purchase price limit is $624,000. The program also has a minimum 640 credit score requirement, although alternative credit history might be considered, and the maximum DTI ratio is 50 percent.

Homes for Iowans

For repeat buyers and first-time homebuyers with higher incomes than what First Home allows, Homes for Iowans offers a lower interest rate mortgage with fewer fees. There’s a household income limit of $163,800 and a home purchase limit of $624,000. You may also be eligible for closing cost and down payment assistance.

Military Homeownership Assistance Program

Iowa’s Military Homeownership Assistance Program is a $5,000 grant for service members, veterans and surviving spouses that can be used toward the down payment and closing costs. The money can be used together with the FirstHome program. There are certain eligibility requirements, including length of service, and you must work with an IFA-approved lender to qualify.

How to find the best mortgage rate in Iowa for you

Additional Iowa mortgage resources

• Iowa loan limits by county: Learn the conforming and FHA loan limits for your city or county.
• Iowa mortgage lenders: Explore home loan lenders in your state.
• Iowa homeowners insurance: Compare policies from a variety of providers.

Meet our Bankrate experts

Written by: Andrew Dehan, Writer, Home Lending

I’ve covered mortgages, real estate and personal finance since 2020. At Bankrate, I’m focused on all of the factors that affect mortgage rates and home equity. I enjoy distilling data and expert advice into takeaways borrowers can use. Prior to Bankrate, I wrote and edited for Rocket Mortgage/Quicken Loans. My work has been published by Business Insider, Forbes Advisor, SmartAsset, Crain’s Business and more.

Read more from Andrew Dehan

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