Mortgage Rates & Financing Options in NH

Mortgage Rates & Financing Options in New Hampshire

A Comprehensive 2026 Guide to Fixed vs Adjustable Loans

One of the most critical decisions in the home buying process is choosing the right mortgage. In New Hampshire, where property values range from modest rural homes to luxury waterfront estates, buyers must evaluate their financing options carefully. With the median home price reaching $535,000 in 2025—and with affordability challenges across the state—understanding how interest rates work, the differences between fixed and adjustable loans, and the local factors that influence your borrowing costs has never been more important. This comprehensive guide explores current mortgage rates, financing strategies, and the specific products available to New Hampshire homebuyers in 2026.

The Current Mortgage Rate Environment in New Hampshire (February 2026)

As of early February 2026, mortgage rates reflect a stabilized but dynamic market. According to current data, the 30-year fixed-rate mortgage averages 6.11–6.19% across New Hampshire lenders, while the 15-year fixed-rate mortgage averages 5.44–5.50%. Adjustable-rate mortgages (ARMs), particularly 5/1 ARMs, are currently offering initial rates around 5.40–5.50%, providing meaningful savings during the fixed-rate period.

For context, mortgage rates have eased considerably from last year. One year ago (February 2025), the 30-year fixed rate averaged 6.89%, making today’s rates roughly 70 basis points lower—a savings that translates to meaningful monthly payment reductions. For example, on a $435,000 mortgage (90% loan-to-value on the state median price), the difference between 6.89% and 6.19% represents approximately $275 in monthly savings, or over $3,300 annually.

The Mortgage Bankers Association expects rates to remain within a narrow band, hovering between 6.0% and 6.5% throughout most of 2026, with potential moderation toward the mid-to-high 5% range if inflation continues cooling as expected. Fannie Mae projects rates could ease into the high-5% range by late 2026, though forecasts remain uncertain given Federal Reserve policy and broader economic conditions.

Understanding How Mortgage Rates Are Determined

Mortgage rates fluctuate based on multiple interconnected factors. The primary driver is the secondary mortgage market, where lenders sell loans to institutions like Fannie Mae, Freddie Mac, and investors. These entities price mortgages based on Treasury yields, particularly the 10-year Treasury bond, which serves as a barometer for long-term interest rates.

Several elements influence your personal rate quote:

• Credit Score: A 740+ score typically qualifies for the best published rates; scores below 660 may face premium pricing of 0.5% to 1.5% or higher.
• Debt-to-Income Ratio (DTI): Lenders prefer DTI below 43%. Higher ratios increase perceived risk and may result in rate adjustments.
• Loan-to-Value (LTV) Ratio: A 20% down payment (80% LTV) typically earns the best rates. Lower down payments trigger private mortgage insurance (PMI) and higher rates.
• Loan Type: Conventional loans, FHA loans, VA loans, and USDA loans all carry different rates reflecting different risk profiles.
• Property Type & Purpose: Primary residences receive lower rates than investment or vacation properties. Second homes typically add 0.25–0.5% to your rate.
• Discount Points: Borrowers can buy down rates by paying discount points upfront (1 point = 1% of the loan amount, typically lowering rates by 0.25%).
• Market Conditions & Lender Competition: Regional competition among credit unions, community banks, and national lenders keeps rates competitive.

Fixed-Rate Mortgages: Stability and Predictability

A fixed-rate mortgage locks in an interest rate for the entire loan term—whether 15, 20, or 30 years. Your monthly principal and interest payment remains identical from month one through final payoff, making budgeting straightforward and protecting you from future rate increases.

Advantages of Fixed-Rate Mortgages

• Payment Certainty: You know your exact monthly payment indefinitely, simplifying long-term financial planning.
• Rate Protection: If rates spike to 8%, 9%, or higher in coming years, your 6% rate provides substantial protection.
• Easier Refinancing Decisions: You refinance only when rates clearly benefit you, not because of payment shock.
• Psychological Peace: Many borrowers value the security of knowing their housing costs won’t escalate.
• Market Favor: Fixed-rate mortgages dominate the market, with lenders offering competitive pricing to attract volume.

Considerations for Fixed-Rate Mortgages

• Rates are typically 0.3–0.6% higher than initial ARM rates, reflecting the lender’s long-term rate risk.
• If rates fall significantly, you must refinance to access lower rates (refinancing typically costs $3,000–$6,000 in closing costs).
• In a rising-rate environment, fixed rates are advantageous; in a falling-rate environment, you may feel you overpaid.

30-Year vs 15-Year Fixed Mortgages: The Mathematics

The most common decision is between 30-year and 15-year fixed mortgages. Here’s a practical comparison on a $400,000 loan:

• 30-Year Fixed at 6.11%: Monthly payment of $2,419 (principal & interest); total interest paid over life of loan: $470,840.
• 15-Year Fixed at 5.50%: Monthly payment of $3,104 (principal & interest); total interest paid over life of loan: $159,720.
• Monthly Difference: $685 additional payment on 15-year loan, but saves $311,120 in total interest.

The 15-year mortgage accelerates wealth-building and saves substantially on interest, but requires 28% higher monthly payments. Many New Hampshire borrowers choose the 30-year mortgage for cash flow flexibility, then make additional principal payments when cash permits—getting the best of both worlds.

Adjustable-Rate Mortgages (ARMs): Lower Introductory Rates with Future Flexibility

Adjustable-rate mortgages feature a fixed introductory period (commonly 3, 5, 7, or 10 years) followed by periodic rate adjustments tied to a market index such as the Secured Overnight Financing Rate (SOFR) or the London InterBank Offered Rate (LIBOR). During the fixed period, ARMs typically offer rates 0.3–0.6% lower than fixed-rate mortgages.

How ARMs Work: An Example

A 5/1 ARM at 5.40% means your rate is fixed for five years, then adjusts annually thereafter. If the market index is 4% and your lender's margin is 2.75%, your adjusted rate becomes 6.75% in year six. Caps limit how much rates can rise: annual adjustment caps (typically 2%) prevent a sudden spike, and lifetime caps (typically 5–6%) limit total increase from the initial rate.

Advantages of ARMs

• Lower Initial Rates: A 5/1 ARM at 5.40% costs roughly 75 basis points less than a 30-year fixed at 6.15%, saving approximately $215 monthly on a $400,000 loan.
• Savings During Fixed Period: For five years, you enjoy measurably lower payments, freeing cash for other investments, home improvements, or debt repayment.
• Opportunity for Short-Term Owners: If you plan to sell or refinance within the fixed period, you capture rate savings without facing adjustments.
• Strategic Refinancing: If rates fall substantially during year 3 or 4, you can refinance into a longer-term fixed mortgage, locking in gains.
• Rate Caps Provide Protection: Annual and lifetime caps prevent unlimited escalation, though payments can still rise significantly.

Risks and Considerations for ARMs

• Payment Shock Risk: When your ARM adjusts, payments can jump substantially. On a $400,000 loan at 5.40%, if rates adjust to 7.40% in year six, your monthly payment rises from $2,288 to approximately $2,663—an additional $375 monthly or $4,500 annually.
• Forecasting Challenge: You must predict future rate environments and your own financial stability five or more years forward.
• Refinancing Risk: If rates have risen by the time your ARM adjusts, refinancing becomes less attractive, trapping you with higher rates.
• Less Popular in Today’s Market: ARMs remain riskier than fixed-rate mortgages and are primarily used by investors or borrowers confident in short-term ownership.
• Affordability Qualification: Lenders typically qualify ARM borrowers on the highest rate the loan could reach, not the initial rate.

When ARMs Make Sense

ARMs are most suitable for: buyers planning to sell within 5–7 years; investors seeking to maximize cash flow during a hold period; those confident rates will not spike dramatically; and borrowers with strong income growth expectations. For most primary homeowners in New Hampshire, the certainty of a fixed-rate mortgage outweighs ARM savings.

Other Loan Program Options in New Hampshire

Beyond conventional fixed and adjustable mortgages, New Hampshire borrowers access several specialized programs:

FHA Loans (Federal Housing Administration)

FHA loans are government-backed mortgages designed for borrowers with modest down payments or credit challenges. Key features include:

• Down Payment: As low as 3.5% of the purchase price, compared to 10–20% for conventional loans.
• Credit Score: FHA loans accept scores as low as 580; approval is possible with scores under 600 with compensating factors.
• Interest Rates: FHA rates typically run 0.25–0.5% higher than conventional mortgages, reflecting the lower down payment risk.
• Mortgage Insurance: Borrowers pay an upfront mortgage insurance premium (1.75% of loan amount) plus annual mortgage insurance premiums (0.55–0.85% annually, depending on LTV). Unlike conventional PMI, FHA mortgage insurance doesn’t automatically terminate at 20% equity.
• Debt-to-Income Flexibility: FHA allows DTI ratios up to 50% in some cases, accommodating borrowers with other obligations.

For a first-time buyer in New Hampshire with $20,000 saved for a down payment on a $300,000 home, an FHA loan offers an achievable path. Conventional financing would require $60,000–$75,000 down; FHA requires only $10,500.

VA Loans (Veterans Administration)

VA loans are exclusively for eligible veterans, active-duty service members, and certain surviving spouses. They offer unparalleled benefits:

• Zero Down Payment: VA loans require no down payment, making homeownership accessible to qualifying military members.
• No Mortgage Insurance: Unlike FHA loans, VA loans carry no mortgage insurance premium.
• Competitive Rates: VA loans typically offer the lowest available rates, often 0.25–0.5% below conventional mortgages.
• Flexible Credit Requirements: VA guidelines are accommodating toward credit scores and debt-to-income ratios.
• Funding Fee: Most borrowers pay a one-time funding fee (1.25–3.6% of loan amount), which can be financed into the loan.

For New Hampshire veterans purchasing the $535,000 median home with zero down, a VA loan eliminates a $107,000 down payment requirement, opening homeownership to thousands of service members who might otherwise wait years to accumulate capital.

USDA Loans (Rural Development)

USDA loans are designed for borrowers in rural areas, offering:

• Zero Down Payment: USDA loans require no down payment for qualified properties and borrowers.
• Income Limits: Borrower household income must not exceed 115% of the area median income (in New Hampshire, roughly $108,000 for a family of four).
• Property Requirements: The property must be in a USDA-designated rural area; some suburban New Hampshire towns qualify, while others do not.
• Rates & Guaranty Fee: USDA rates are competitive; borrowers pay a 2% guarantee fee upfront.

USDA loans enable rural New Hampshire families to become homeowners without accumulating down payment savings, though income restrictions limit access.

Jumbo Mortgages

Jumbo loans exceed Fannie Mae and Freddie Mac conforming limits (currently $766,550 nationally, varying by county). New Hampshire has several high-value markets, particularly along the seacoast and in resort areas, where jumbo loans are common.

• Rates: Jumbo rates typically run 0.25–0.75% higher than conforming loans, reflecting concentrated risk.
• Down Payment: Lenders generally require 10–20% down, though sometimes higher.
• Credit & DTI: Jumbo loans require strong credit (typically 700+) and conservative DTI ratios (below 36%).

Portfolio Loans and Community Bank Products

New Hampshire’s robust community banking sector offers portfolio loans, where lenders keep mortgages in-house rather than selling them on the secondary market. These products provide flexibility for:

• Non-traditional income documentation (self-employed borrowers, investors).
• Unique property types (new construction, investment properties).
• Relationship-based pricing and terms.
• Faster closings and local decision-making.

New Hampshire's Leading Mortgage Lenders and Credit Unions

New Hampshire borrowers benefit from strong competition among local and national lenders. Key players include:

• St. Mary’s Bank: A New Hampshire-based credit union offering mortgages throughout New England with competitive rates and flexible terms.
• NHFCU (New Hampshire Federal Credit Union): Capital Area’s favorite credit union, offering conventional, VA, FHA, and specialty mortgage products.
• Bellwether Community Credit Union: Committed to offering some of the best mortgage rates in New Hampshire with personalized service.
• Union Bank (VT & NH): Regional community bank with strong New Hampshire market presence.
• Navy Federal Credit Union: Available to military members and families, offering VA and other military-friendly products.
• National Lenders: Rocket Mortgage, Better.com, and other online lenders compete on rates and convenience.

Credit unions often provide member benefits such as rate discounts, waived fees, or relationship-based pricing. A 0.125% rate discount from a credit union saves over $200 annually on a $400,000 mortgage—reason enough to check with local institutions.

Rate Lock Strategies and Timing

One of the most consequential decisions in the mortgage process is when to lock your rate. A rate lock freezes your interest rate for a specified period, typically 30, 45, or 60 days, protecting you from market rate increases while your application is underwritten and approved.

Understanding Rate Lock Mechanics

When you lock a rate, the lender commits to providing that rate at closing, regardless of market movement. If rates rise, you benefit; if rates fall, you pay the locked rate unless your loan includes a rate-lock float-down provision.

Float-Down Options

Many lenders offer float-down options, allowing borrowers to capture lower rates if they drop after locking. A typical float-down costs $300–$500 and permits one or two rate reductions during the lock period. Given current market volatility and expert expectations for modest rate movement, float-down options provide valuable insurance, especially if your lock period extends beyond 45 days.

Rate Lock Timing Strategy

Industry experts recommend:

• If You’re Ready to Close: Lock your rate immediately. The phrase "marry the house, date the rate" reflects market reality: if you find the right home, secure the rate, then refinance if rates fall significantly later.
• If Rates Have Fallen Recently: Locking makes sense; further declines are uncertain, and waiting risks rates rising back.
• If Forecasts Predict Increases: Lock sooner rather than later; extended locks (60 days) add 0.125–0.25% but protect against adverse movement.
• Consider Market Momentum: If the Fed is cutting rates and inflation is moderating, floating briefly may be strategic; if Fed policy is uncertain, locking provides security.

2026 Rate Lock Outlook

With the Mortgage Bankers Association forecasting rates to remain in the 6.0–6.5% range for much of 2026, and Fannie Mae projecting potential movement to the high-5% range by late 2026, rates may not drop dramatically. This favors locking in current rates (6.11–6.19%) rather than speculating on significant declines. A 25 basis point drop by Q4 2026 would save approximately $85 monthly, insufficient to offset refinancing costs; only drops exceeding 0.5% justify refinancing.

Improving Your Rate: Strategies to Reduce Your Mortgage Cost

Your quoted rate isn’t fixed in stone; multiple actions can lower your borrowing cost:

1. Build Credit Before Applying

Six months before applying, pay down revolving credit to reduce your debt-to-income ratio and lower your credit utilization. A jump from 35% utilization to 10% might improve your score 10–30 points. Each 20-point increase can lower your rate by 0.125%, saving roughly $55 monthly on a $400,000 mortgage.

2. Increase Your Down Payment

Moving from 10% ($50,000) down to 20% ($100,000) down eliminates PMI and often reduces your rate by 0.25–0.375%. The $50,000 additional down payment saves $85–130 monthly, recouping the additional capital in 4–6 years through lower payments.

3. Buy Discount Points

Discount points cost 1% of the loan amount per 0.25% rate reduction (roughly). On a $400,000 loan, one point ($4,000) might lower your rate from 6.19% to 5.94%, saving $83 monthly. You break even in 48 months; after that, it’s pure savings. This strategy favors long-term owner-occupants.

4. Shorten Your Loan Term

15-year mortgages typically carry rates 0.35–0.50% lower than 30-year mortgages. On a $400,000 loan, the rate difference (6.11% vs 5.50%) saves $63 monthly despite higher principal payments. Combined with lower total interest, 15-year loans accelerate wealth-building.

5. Choose a Conforming Loan

Conforming loans (under $766,550 nationally) receive better rates than jumbo mortgages. If your purchase price creeps above the jumbo threshold, lowering your loan amount by increasing your down payment can access conforming rates, saving 0.25–0.5%.

6. Optimize Your Property Type

Owner-occupied primary residences receive the best rates. Investment properties and vacation homes typically add 0.25–0.5% to your rate. If purchasing a second home, consider owner-financing or portfolio loan programs that may offer competitive rates.

New Hampshire Housing Finance Authority: Programs and Resources

The New Hampshire Housing Finance Authority (NHHFA) operates programs designed to assist first-time homebuyers and moderate-income New Hampshire residents:

NHHFA Mortgage Programs

• Homebuyer Loans: NHHFA offers competitive-rate mortgages paired with down payment assistance grants (often $10,000–$15,000), reducing the down payment requirement and closing costs for qualified borrowers.
• First-Time Homebuyer Education: NHHFA-approved homebuyer education classes (available online or in-person) teach budgeting, homeownership responsibilities, and financing strategies; completing a course can improve lender terms.
• Income Limits: NHHFA programs serve households earning up to 120% of area median income, roughly $130,000 for a family of four in 2026.
• Special Initiatives: NHHFA administers federal programs including Low-Income Housing Tax Credits (LIHTC) for rental development and community development block grants.

Accessing NHHFA Assistance

Eligible borrowers can apply directly through NHHFA or through participating lenders, such as St. Mary’s Bank or other NHHFA partners. Qualification requires a first-time homebuyer status (or long-term non-homeowner status), income documentation, and completion of homebuyer education. Down payment assistance typically requires a modest contribution from the borrower (3–5%), creating genuine skin-in-the-game.

The Impact of New Hampshire's Tax Landscape

New Hampshire’s unique tax structure affects homeownership affordability. The state has no income tax or sales tax, meaning homeowners keep more of their income available for mortgage payments. However, property taxes are the second-highest in the nation (averaging 0.95% of home value annually). On the $535,000 median home, expect annual property taxes of roughly $5,080, or $423 monthly—equivalent to adding 0.25% to your effective mortgage rate.

When calculating your true housing cost, always include property taxes, homeowners insurance (typically $1,200–$1,500 annually), and HOA fees (if applicable). Many New Hampshire buyers underestimate these "hidden" costs, which can equal or exceed the mortgage payment itself.

Monthly Payment Examples for New Hampshire Homebuyers

To illustrate real-world costs, here are monthly housing expenses for a median-price home ($535,000) with a 10% down payment ($53,500), financed through a $481,500 mortgage:

• Mortgage Payment (Principal & Interest at 6.19%): $2,928
• Property Taxes (0.95% annually): $423
• Homeowners Insurance: $110
• PMI (at 10% down): $215
• Total Monthly Housing Cost: $3,676

This borrower needs annual income of approximately $164,000 (assuming 27% housing expense ratio) to comfortably afford the median New Hampshire home. With the statewide affordability index at 58, this explains why many New Hampshire families struggle with homeownership costs.

The Affordability Challenge: 2026 Context

The 2025 New Hampshire Affordability Index stood at 58, meaning the median household income in New Hampshire is only 58% of what’s required to qualify for the median-priced home. For perspective, an index above 100 means a household has sufficient income to afford the median home; below 100 indicates affordability stress.

The index has fallen for years, last exceeding 100 in 2021 when prices and rates both moved lower. While the 3.9% price increase in 2025 was the smallest in a decade (a modest sign of cooling), rates remain elevated compared to the sub-3% environment of 2020–2021.

Nonetheless, New Hampshire remains more affordable than neighboring Massachusetts, Connecticut, and some Rhode Island markets, attracting buyers from the region willing to trade longer commutes for lower prices.

Fixed vs Adjustable: Decision Framework for 2026

Choosing between fixed and adjustable mortgages depends on your circumstances:

• Choose Fixed-Rate if: You plan to own the home for 7+ years; you value payment certainty; you believe rates will rise; you have limited income flexibility; you are risk-averse; you plan to refinance only if rates fall dramatically.
• Consider an ARM if: You plan to sell within 5 years; you have strong income growth expectations; you value short-term cash flow savings; you can afford potential payment increases; you plan strategic refinancing; your property is an investment.

For most New Hampshire primary homebuyers in 2026, fixed-rate mortgages make sense. Rates (6.11–6.19% for 30-year, 5.44–5.50% for 15-year) offer reasonable stability, and the ARM savings of 75 basis points ($215 monthly on $400,000) don’t justify the complexity and future payment risk.

The Importance of Preapproval and Comparative Shopping

Before beginning your home search, obtain preapproval letters from at least three lenders. Each lender runs your credit, documents your income, and issues a preapproval valid for 60–90 days. Compare not just rates but also:

• APR (Annual Percentage Rate), which includes fees and points, not just the interest rate.
• Lender fees, including origination, processing, underwriting, and appraisal fees.
• Closing costs, which typically range $7,500–$12,000 (1.5–2.5% of loan amount).
• Discount points, which lower rates but increase upfront costs.
• Loan products offered (FHA, VA, conventional, portfolio products).
• Rate lock terms and float-down options.
• Customer reviews and accessibility.

A preapproval also signals to sellers that you are serious and financially qualified, strengthening your position in competitive markets.

Working with a Real Estate Professional

A knowledgeable New Hampshire real estate agent guides you through the mortgage process, explains local market conditions, and coordinates with your lender. Agents have experience with multiple lenders and can recommend those with strong track records for quick closings and responsive service. In New Hampshire’s diverse market—from Lakes Region properties to Seacoast waterfront to North Country mountain homes—local expertise is invaluable.

Refinancing: Watching for Opportunities

After closing on your mortgage, monitor rate movements. If rates fall by 1% or more (e.g., from 6.19% to 5.19%), refinancing may save thousands in interest over the remaining loan term. A refinance costs $3,000–$6,000; this break-even point is typically 18–24 months.

Use online calculators to estimate your break-even point. If you plan to own the home longer than your break-even timeline, refinancing is financially sound. Conversely, if you might sell within two years, refinancing doesn’t make sense.

Common Mortgage Mistakes to Avoid

Avoiding these pitfalls protects your financial security:

• Not Shopping Multiple Lenders: Rate differences of 0.25–0.5% are common; comparing three lenders can save $100–150 monthly.
• Focusing Only on Interest Rate: APR, which includes fees, is more important than the quoted rate.
• Choosing ARM Without Understanding Adjustment Risk: Payment shock in year six can strain finances significantly.
• Overextending with Debt-to-Income Ratios: Just because a lender qualifies you for $500,000 doesn’t mean you can comfortably afford it.
• Making Large Credit Purchases Before Closing: New debt can derail your approval; avoid car loans, credit cards, and major purchases.
• Failing to Get Preapproved: Preapproval clarifies your budget and shows sellers you are serious.
• Underestimating Total Housing Costs: Property taxes, insurance, HOA fees, and maintenance often equal or exceed the mortgage.
• Not Locking Rates When Market Is Uncertain: Extended locks add 0.125–0.25% but protect against adverse movement.

The Road Ahead: 2026 Mortgage Market Outlook

The 2026 mortgage market is expected to remain relatively stable, with rates fluctuating between 6.0% and 6.5% for much of the year. Potential catalysts for rate movement include:

• Federal Reserve Policy: If the Fed cuts rates in mid-to-late 2026 as some experts expect, mortgages could ease toward the high-5% range.
• Inflation Trends: Persistent inflation would support higher rates; cooling inflation would support lower rates.
• Employment & Economic Growth: Weakening employment could trigger Fed cuts and lower mortgage rates.
• Bond Market Yield Movements: 10-year Treasury yields directly influence mortgage rates; watch Treasury auctions and economic data.

Bottom line: Don’t wait for perfect rates. Current rates (6.11–6.19%) are reasonable, down substantially from a year ago. If you find the right New Hampshire home, secure your financing.

Conclusion: Making Your Financing Decision

Choosing the right mortgage is one of the most consequential financial decisions you’ll make. By understanding fixed-rate versus adjustable-rate mortgages, exploring New Hampshire-specific financing programs, comparing lenders strategically, and locking rates at the appropriate time, you position yourself to achieve homeownership success.

For most New Hampshire homebuyers in 2026, a 30-year fixed-rate mortgage in the 6.11–6.19% range offers predictability and protection. Those with shorter time horizons and strong income may explore ARM options. First-time buyers should investigate NHHFA programs and FHA loans, which offer lower down payment requirements and down payment assistance. Veterans should leverage VA loans, which offer zero down and no mortgage insurance.

The key is not to chase the absolute lowest rate but to find a loan product that aligns with your timeline, risk tolerance, and financial stability. By working with trusted professionals—a qualified mortgage lender, a knowledgeable real estate agent, and perhaps a financial advisor—you can navigate New Hampshire’s housing market with confidence.

Ready to explore your New Hampshire homeownership options? Bean Group | brokered by eXp Realty specializes in navigating the state’s diverse real estate market and connecting buyers with trusted lenders and financing programs. Contact our team today to discuss your mortgage options, review current rates, and start your journey toward homeownership. Whether you’re a first-time buyer, an investor, or a relocating family, we’re here to guide you through every step of the financing and home buying process.