GOBankingRates has identified the 10 worst states to get a mortgage loan based on its ranking of all 50 states according to local rates on 15- and 30-year fixed-rate mortgages (FRMs) and average home listing costs. The Northeast and West are most represented among the group, with four states from each region ranked among the worst places in the U.S. for getting a mortgage. Read on to see if your state has some of the most expensive home loans, starting with the No. 1 worst state to get a mortgage.
For a full methodology, including sources and weighting, skip to the last slide.
Hawaii actually has a decent average 15-year mortgage rate at 3.031% APR, but this isn't enough to outweigh the state's listing prices, which are the highest in the nation at an average of $1,019,316, according to Trulia. Hawaii's 30-year mortgage rate average doesn't help matters much; the middling average rate of 3.768% would result in a staggering $4,731 monthly mortgage payment for the average home listing price.
Like Hawaii, California is another Western state that carries huge mortgage costs due its high-priced real estate. California's $819,518 average listing price is significantly lower than Hawaii's but is still the second-highest in the nation. The state's 30-year average mortgage rate doesn't do much to make up for the high housing costs either; the 3.772% average mortgage rate is among the higher rates in this survey.
3. New York
New York's big downfall also is its high housing costs: The state's average listing price is $782,672. The state actually offers decent mortgage rates, with its average 15-year FRM rate falling below the national average and its 30-year FRM rate on par with the national average. Still, the savings offered by middling mortgage rates won't offset the cost of a giant home loan.
Connecticut residents should watch out; the state's average 15-year mortgage rate of 3.069% is the worst in the nation. The Northeast state also has an average 30-year mortgage rate that is on the higher end at 3.774% APR. Higher home costs don't help, either, with Connecticut's $592,603 average listing price making mortgages an even worse deal for its residents.
Though Colorado's rates are not as dismal as rates in Connecticut, they are still not great. The state's average 15-year mortgage rate lands it in the middle of the GOBankingRates study, while its average 30-year FRM rate is slightly higher than in most states. But what will hurt Colorado residents' budgets the most is the high home prices in the state. The average listing price is $622,094.
Utah's 30-year mortgage rate average is the second-highest in the nation at 3.783% APR, and its average 15-year mortgage rate is just on par with the national average. These rates will hit residents hard when combined with the high cost of homes in the state — the average home listing price is $555,247.
Even though Massachusetts has one of the lowest average 15-year mortgage rates (3.038%), this is offset by the state having the third-highest average rate on 30-year FRMs (3.780%). This high rate and the expensive home prices in the state put Massachusetts at No. 7 among the worst states to get a mortgage loan.
8. Rhode Island
With a middling 30-year mortgage rate and worse-than-average 15-year mortgage rate, Rhode Island residents might have a harder time tracking down a good deal on a mortgage. The high average home price in the state, $445,822, also works against local home buyers.
Florida's mortgage rates are another trade-off; while its average 15-year mortgage rate is one of the lowest of any state (3.023%), its average 30-year mortgage rate is the worst in the nation (3.789%). The state's higher home costs also make mortgages more expensive in this state, with an average listing price of $454,690.
Texas offers an average home listing price of $370,678, which is above the national median, according to Trulia. The average mortgage rates in Texas add to the cost of a home loan. The state's average 30-year mortgage rate (3.779%) is the fourth-worst in the nation, and its average 15-year mortgage rate is the fifth-worst at 3.063%.
Methodology: This study ranked all 50 states according to average rates on 15- and 30-year fixed-rate mortgages and the state's average home listing price. Mortgage rates were sourced for the first four months of 2015 (January to April) from MortgageMarvel.com and averaged for each product and state. Average listing prices for all states were also sourced from Trulia for the week ending June 3, 2015. States were scored for each rate average on 15- and 30-year mortgage rates, and these two scores were averaged and weighted by the local listing price score to generate the final rankings.