States With Lowest Mortgage Rates; CA Wins! Why? Bringing Low Rates To Texas!

Lending Tree recently did a study to see which states offered the lowest mortgage rates.

And surprisingly, California (the land of all-things-expensive) won!

The next best states for low mortgage rates were New Jersey, Washington, Massachusetts, Utah, and Colorado.

The worst five states for rates were New York, Iowa, Arkansas, Oklahoma, and Maine.


There are several factors that influence rates among states including average loan amount, business costs and competition.

States with larger loans often have lower rates b/c lenders get paid as a percentage of the loan amount. They can therefore offer lower rates and still get reasonable commission checks.

In addition, regulations matter. For example, “judicial foreclosure” states sometimes have higher rates b/c it is more expensive/difficult for lenders to foreclose in those states.

This is in contrast to “deed of trust” states like California and Texas, where the foreclosure process is much faster and easier.

But, probably the biggest reason rates are lower in California is competition.

California, for example, has 40% more people than Texas but 100% more (or twice as many) loan officers.

California has 100,000 licensed loan officers in fact, and all of them are fighting for a slice of a pie that is forever shrinking now that online lenders are proliferating and refi’s are drying up.

The result of all that competition is lower rates, as lenders invariably have to compete with rates at some point no matter how great their service is.


Texas is in the middle of the pack, but not for long b/c all of us Californians are moving to Texas and bringing our low rates with us.

In all seriousness, the brutal competition in California forces lenders like us to become ultra-efficient in order to compete.

And now that we are in Texas (with Texas born and raised team members I might add), we are getting traction much faster than we expected b/c our rates and our value propositions in general are so much better than our competitors’.

You can read the full Lending Tree article here, and you can read a WSJ article that references it here.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646

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