Mortgage rates in Alabama
Average 30-year fixed 6.49% · Updated July 9, 2026 · Freddie Mac (FRED)
Alabama has one of the lowest effective property-tax rates in the country. Below is what buying at Alabama's median price looks like at today's national average rate, plus the local property tax and assistance that actually change your payment.
What a mortgage costs in Alabama
The interest rate on a Alabama mortgage is the same 6.49% national average a lender would quote anywhere — rates are set by the bond market, not by your state. On Alabama's median $339,950 home with 20% down, the mortgage totals $271,960, or about $1,717 a month in principal and interest.
What makes Alabama different is the cost around the loan. Its 0.4% effective property-tax rate adds roughly $113 a month, and homeowners insurance about $127 more — bringing the all-in estimate to $1,958. Those local costs, not the interest rate, are what set Alabama apart. Your own price and down payment will move the number — work backward from your income with the home-price affordability tool.
Getting approved in Alabama
Federal HMDA lending records show Alabama lenders originated 115,118 home loans in 2025 and denied 41,252 applications — an approval rate near 73.6% among decisioned applications, against 76.6% nationwide. See how all 50 states compare in our nationwide approval report, and how Alabama ranks for complaint rankings (4,242 on record).
Shopping for a loan? See the most active mortgage lenders in Alabama, ranked by federal HMDA volume.
Down-payment help in Alabama
You rarely need 20% down. AHFA — Alabama's housing finance agency — runs the state's main assistance program: Step Up offers a 10-year second mortgage covering the down payment. Eligibility usually turns on income limits and a homebuyer-education course. Check current terms at AHFA, see how a smaller down payment changes your number with the how-much-down calculator, or compare the full state-by-state directory.
Alabama mortgage FAQ
What is the current mortgage rate in Alabama?
As of July 9, 2026, the U.S. average 30-year fixed rate is 6.49%. The note rate itself is set nationally, not by state — a lender prices your Alabama loan the same way it would anywhere, based on your credit, down payment and loan type.
What changes locally is everything around the rate: Alabama's ~0.4% effective property tax, insurance costs, and which assistance programs apply.
What is the monthly payment on a typical Alabama home?
On Alabama's median home price of about $339,950 with 20% down at today's 6.49% average 30-year rate, expect roughly $1,958/month — that's $1,717 principal and interest plus about $113 property tax and $127 insurance. Adjust the numbers for your exact price and down payment in our calculators.
How hard is it to get approved for a mortgage in Alabama?
In 2025, Alabama lenders originated 115,118 home loans and denied 41,252 applications — an approval rate of about 73.6% among decisioned applications, versus 76.6% nationally, according to federal HMDA data. See how every state ranks in our mortgage approval report.
Rates shown are national weekly averages for general guidance, not an offer or personalized quote. Payment estimates assume the down payment noted plus estimated taxes and insurance. Confirm current pricing with a licensed lender.