Indiana Mortgage and Refinance Rates

Current mortgage rates in Indiana

As of Wednesday, July 10, 2024, current interest rates in Indiana are 6.94% for a 30-year fixed mortgage and 6.47% for a 15-year fixed mortgage.

Residential real estate is relatively well-priced in The Hoosier State: As of February 2024, the median sales price of a home is $241,000, well below the national median of $344,157, according to ATTOM. Still, that’s nearly a 7 percent increase year-over-year, and given that median down payments have jumped 89 percent in the same period, affordability is becoming a challenge for Indiana residents, as it is for aspiring homeowners around the country.

Refinance rates in Indiana

While mortgage refinance rates have more than doubled since the pandemic, many Indiana homeowners have much more tappable equity now: the average mortgage-holder has gained $14,000 since 2023, according to CoreLogic. With a cash-out mortgage refinance, you could take advantage of this asset to help further your financial goals.

Indiana 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 Indiana.

National mortgage rates by loan type

Mortgage statistics for Indiana

• Most popular cities: Indianapolis, Fort Wayne, Evansville, South Bend, Bloomington
• Most affordable counties (based on median home value): Sullivan, Blackford, Randolph, Vermilion, Jay
• Median home sales price, Feb. 2024: $241,000
• Median home value, Feb. 2024: $222,709
• Median down payment, Feb. 2024: $43,344
• Homeownership rate, Q4 2023: 73.3%%

Sources: ATTOM, U.S. Census Bureau

Mortgage options in Indiana

If you're a homebuyer in Indiana, begin by exploring these options:

• Conventional loans
• FHA loans
• VA loans or USDA loans (only available to borrowers who have served in the military or buying in rural areas, respectively)

Conventional loans are the most common type of mortgage. They come with either a fixed or adjustable rate, loan terms of anywhere from eight to 30 years and a down payment requirement as low as 3 percent, depending on the program. These are generally best for borrowers who have a credit score of at least 620.

If you don't qualify for a conventional loan, your next option might be an FHA loan. These are similar to conventional loans in terms of structure and a low down payment requirement (3.5 percent), but allow for a credit score as low as 580.

First-time homebuyer programs in Indiana

Qualifying individuals and families in Indiana may have access to a variety of national first-time homebuyer programs and educational opportunities to help them navigate the homebuying process — but there are also first-time homebuyer programs available specifically to residents of Indiana.

IHCDA Step Down program

The Step Down program is an interest-only mortgage offered through the Indiana Housing and Community Development Authority (IHCDA), and partnering lenders. It comes as either an FHA or conventional 30-year fixed-rate mortgage. To take advantage of it, you must:

• Be a first-time homebuyer who has not had ownership interest in a property within the past three years, or be buying in a targeted area.
• Be buying a primary residence in Indiana.
• Meet area-specific income and purchase limits.
• Purchase price cannot exceed appraised value.
• Pay a $250 non-refundable reservation fee.

IHCDA First Step program

The IHCDA First Step program is a down payment assistance (DPA) program that provides up to 6 percent of the purchase price in the form of a non-forgivable loan. It must be used in conjunction with a 30-year fixed rate loan — either an FHA loan or conventional loan. While non-forgivable, it doesn’t require monthly payments; it only has to be paid back in full at the end of the mortgage term or if you sell the home.

Here are some of the requirements to qualify:

• Be a first-time homebuyer who has not had ownership interest in a property within the past three years, or be buying in a targeted area.
• Must be a primary residence in Indiana.
• Meet area-specific income and purchase limits.
• Purchase price cannot exceed appraised value.
• Must be used with a 30-year fixed rate FHA or conventional loan.
• Pay a $250 non-refundable reservation fee.

IHCDA Next Home program

Next Home is another option from the IHCDA to help make your home purchase more affordable, although it’s open to anyone, not just first-time homebuyers. The down payment assistance is smaller compared to the First Step program: only up to 3.5 percent of the purchase price. The borrower requirements, income limits and property cost limits, however, are the same as the First Step program.

Mortgage credit certificate (MCC)

Indiana first-time homebuyers can also save through a mortgage credit certificate (MCC), administered locally by the IHCDA, which converts a portion of their mortgage interest paid into a federal tax credit. The MCC helps reduce the taxes borrowers would otherwise have to pay. The maximum tax credit each year is $2,000.

The MCC is available to low- to moderate-income first-time homebuyers who work with an approved mortgage lender. Minimum credit scores, household income limits and purchase price limits apply.

How to find the best mortgage rate in Indiana for you

• Step 1: Strengthen your credit score - Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your credit score if needed.
• Step 2: Determine your budget - To find the right mortgage, you’ll need a good handle on how much house you can afford.
• Step 3: Know your mortgage options - There are a few different types of mortgages.
• Step 4: Compare rates and terms from several lenders - Rate-shop with at least three different banks or mortgage companies.
• Step 5: Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Additional Indiana mortgage resources

• Closing Costs In Indiana: Learn who pays for what when sealing the deal. 
• Indiana Conforming And FHA Loan Limits By County: Learn the conforming loan limit for your city or town.
• Buying a house in Indianapolis: Learn the real estate scene in Indiana’s largest town.
• Best Homeowners Insurance in Indiana: Compare policies from a variety of providers.
• Indiana mortgage lenders: Compare loans and offers around the state.

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

Read more from Jeff Ostrowski

Edited by: Troy Segal, Senior Editor, Home Lending

I’ve been writing and editing stories in the personal finance sphere for two decades, for publications like Business Week and Investopedia, covering everything from entrepreneurs to taxes. Since coming to Bankrate, I’ve concentrated on real estate, mortgages, renovations and other financial aspects of homeownership — helping people understand how a home isn’t just a place to live, but an investment that’s important to building and bequeathing wealth. 

Read more from Troy Segal