Overview of Ohio Mortgages
Mortgage rates in the Buckeye State have consistently oscillated just slightly above and below average levels. The conforming loan and FHA limits for Ohio counties are almost fully at the maximums. Ohio homebuyers can use the mortgage calculator on SmartAsset to determine whether their monthly payments fall within their means.
Ohio historical mortgage rates
Quick Stats on Mortgage Rates in Ohio
The median home value in the United States is $180,200.
Rate of Loan Funding: 59.58% (CFPB)
67.4% of Americans own a home (St. Louis Fed)
Costs of Homeownership: $1,338 Per Month on Average (US Census Bureau)
Ohio is a mecca for cultural, artistic, and outdoor enjoyment, from Cleveland’s Rock and Roll Hall of Fame to Cincinnati’s baseball history and the Columbus Museum of Art. There are many interesting cities to pick from as a home base. Additionally, Ohio is one of the most populous states in the country.
Ohio mortgage rates hover above and below the national average.
A financial advisor in Ohio can help you plan for the homebuying process. Financial advisors can also help with investing and financial plans, including tax, retirement and estate planning, to make sure you are preparing for the future
Ohio Mortgages Overview
Ohio homes are valued well below the rest of the nation, with a median home value of $180,200. This is considerably cheaper than the U.S. median of $281,400. That makes the state one of the more affordable places to settle down.
The conforming limits for Ohio counties are all at the standard $726,200. Again this reflects the overall affordability of real estate in the state. The standard FHA limit is $472,030 in most Ohio counties. However 10 counties have an FHA limit of $488,750. These counties are Delaware, Fairfield, Franklin, Hocking, Licking, Madison, Morrow, Perry, Pickaway and Union.
Ohio state law requires home sellers to provide buyers with a disclosure form listing details on the property. This list should include information on wiring and electrical, water damage and any environmental hazards. The purpose of these disclosures is to protect buyers, but a home inspection is always a smart idea to help you avoid uncovering big problems down the line.
30-Year Fixed Mortgage Rates in Ohio
If you are looking for a home loan in Ohio, more likely than not you will end up with a 30-year fixed-rate mortgage. This reliable home loan option is especially popular for buyers who plan to stay in their home for a long time, as you have three decades to pay off the loan. Over that time, the interest rate remains the same which makes it easier to budget those monthly payments.
The average Ohio rate for a fixed 30-year mortgage is 6.28% (Zillow, Jan. 2023).
Ohio Jumbo Loan Rates
Ohio county conforming loan limits are all $726,200. That means that if you take out a home loan anywhere in the state that is equal to or less than $726,200, you will have what is considered a conforming loan. This means that the loan is eligible for normal interest rates and can be resold on the secondary mortgage market.
On the flip side, if you decide to take out a loan that exceeds $726,200 in order to pay for your new Ohio house, you will have a “jumbo loan.” Jumbo loans are subject to higher interest rates. So you may want to reconsider whether it’s a better idea for you to find a home that fits more comfortably within your budget. Note that currently, jumbo loan rates are lower than fixed rates.
The average 30-year fixed jumbo loan rate in Ohio is 5.83% (Zillow, Jan. 2023).
Ohio ARM Loan Rates
An adjustable-rate mortgage (ARM) might be a good idea if you are not planning to stay in your new home long term. With an ARM, you will be given a lower interest rate for a period of one, three, five, seven or 10 years, depending on the loan’s terms. Once that period has ended, the interest rate can increase (or decrease). It is worth noting that the interest rate is capped at a certain level in the terms, which means you do know what you are getting into when you choose an ARM.
Even if you think you will be out of the home long before the introductory period ends, it is still a smart idea to check what the interest rate cap is and to see if it something that you would be able to pay if your plans were to change.
The average rate for a 5/1 ARM in Ohio is 5.55% (Zillow, Jan. 2023).
Ohio Mortgage Resources
Buckeye buyers have a couple assistance options to help fund their home purchase.
The Ohio Housing Finance Agency offers homeowner incentives for first-time buyers. The down payment assistance program applies 2.5% or 5% of the home’s purchase price toward the down payment, closing costs or other pre-closing costs. This down payment assistance is forgiven after seven years, unless you sell or refinance your home within that time period.
A Mortgage Tax Credit offers additional income for first-time homebuyers by cutting down on the amount of federal income tax liability that the borrower owes. With this credit, part of the mortgage interest is a tax credit up to $2,000.
The United States Department of Agriculture Rural Development offers a program in rural Ohio communities which helps residents secure housing. If you qualify, loans and grants are available to help you purchase a new home or repair your current home.
Ohio Mortgage Taxes
Ohio charges taxes on real estate transfers. The taxes in Ohio are 0.1%, and there is an additional local option of 0.3%. Ohio sellers typically pay this fee.
If you are an Ohio homeowner who also makes itemized deductions on your federal taxes, you should be aware that you can deduct the mortgage interest that you pay from your taxable income. Ohio is one of 10 states that does not allow itemized deductions so unfortunately you cannot make this deduction on your state income taxes as well.
Methodology
In order to determine the best places in the country to get a mortgage, our study compared four factors, including overall borrowing costs, the likelihood of securing a mortgage, property taxes and annual mortgage payments.
To calculate the overall borrowing costs, we analyzed the expected costs throughout the first five years for a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to mortgage originations (secured mortgages) in each county. Annual mortgage payments are a measure of the annual principal and interest payments for a $200,000 loan in that location using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
