Source: GoBankingRates and RateWatch Methodology: GoBankingRates surveyed mortgage rates for all 50 states and the District of Columbia using data from RateWatch. The study looked at more than 102,000 15-year fixed, 30-year fixed and five-year adjustable-rate mortgage products to find the weighted average for each state and the District of Columbia.
And borrowers in Rhode Island are benefiting the most, according to a survey by loan information sites GoBankingRates and RateWatch. Borrowers there paid an average rate of just 3.4% on mortgages in July, about 0.35 percentage points below the national average.
Borrowers also tend to see lower rates in places where home prices are higher. That's because lenders incur many fixed, transaction costs. It can be just as expensive to process a $100,000 mortgage as a $300,000 one so lenders make up for that by charging higher rates for the smaller loans.
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Risk is also a factor. The lower the average credit score in an area, the higher the rates. Also, states that make it easier to foreclose on delinquent buyers tend to be cheaper, according to James Zussman, a business development associate for RateWatch.