Residents in Pennsylvania are getting a better deal on their mortgages than the majority of Americans, according to a recent survey from loan information sites GoBankingRates.com and RateWatch.com.
According to the data, Pennsylvania ranked number four among the states with the cheapest rates, where borrowers paid an average rate of 3.55 percent in July. That’s about 0.2 percentage points below the national average.
While the difference may seem slim, the figures add up in the thousands for a 30-year loan.
New Jersey (No. 14) and Delaware (No. 31) have rates closer to the national average.
Rhode Island took the top spot for the cheapest rate with an average rate of 3.4 percent, while Nebraska was calculated as the most expensive state with a rate of 4.1 percent.
So what factors into these rates? Nationally, it’s the U.S. bond yields, inflation and mortgage-backed securities, while local factors include property values, default rates, and unemployment.
Risk is also a factor, according to Bennie D. Waller, Ph.D, professor of finance and real estate at Longwood University.
“Areas with a higher risk of default will command a higher mortgage rate,” Waller told GoBankingRates.com. “Much like we saw different areas of the country encounter varying degrees of housing default in the 2007-2008 housing crisis, different areas will also have varying degrees of credit risk.”
GoBankingRates.com surveyed mortgage rates in the 50 states and Washington, D.C. by using data from RateWatch.com. The study looked at more than 102,000 mortgage products – including 15-year fixed and 30-year fixed loans – to find each average rate.
Top 10 states with the cheapest mortages:
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