Getting the Best Mortgage Rates in Colorado (10-15-30-Year Fixed, 5/1, 7/1 ARM)

It’s no secret that purchasing a home comes with a ton of outright and hidden costs, and the real estate market in Colorado is no different.

In fact, potential homeowners considering a Colorado mortgage may find themselves paying more than most. The closing costs associated with Colorado mortgages are relatively high, averaging between 2-5 percent of the purchase price.

For a $200,000 home with a 20 percent down payment, these closing costs equate to an average of $1,990 simply to close the sale.

With rising property values and increasing closing costs, it’s more important than ever for homebuyers to find a manageable mortgage rate in Colorado.

Whether you are in the market to refinance or buy a home in Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, Thornton, Westminster, Centennial, or any other city in Colorado, the best Colorado mortgage rates will ensure that home ownership remains sustainable over the long-term.  

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Which Colorado City Are You Located in?

When it comes to finding the best Colorado mortgage rates, there are plenty of factors to consider. For many Colorado mortgage lenders, the location of the home will play a large role in what type of mortgage rates in Colorado are available.

This means that homes in Aurora, Colorado Springs, Denver, Thornton, Fort Collins, Lakewood, and other cities could have varying Colorado mortgage rates based on the city, neighborhood, and the condition of the home itself.

While searching for the best mortgage rate in Colorado, it may be worthwhile to explore whether a neighboring city offers a better Colorado mortgage rate to make your personal path to homeownership more affordable over the long run.

See the table below for a list of some of the largest cities in the state offering a wide range of Colorado mortgage lenders.

Top Colorado CitiesPopulation (2015-2016)
Colorado Springs465,101
Fort Collins164,207

Source: Google

Getting Better Colorado Mortgage Rates with Larger Down Payments

Although some Colorado mortgage lenders require a down payment of 3 percent, the best way to secure better mortgage rates in Colorado is to put down at least 20 percent of the home’s value.

Along with getting more favorable Colorado mortgage rates, a higher down payment means that you can avoid paying extra for private mortgage insurance (PMI).

Colorado mortgage lenders require the purchase of mortgage insurance for smaller down payments to protect their investments in case borrowers stop making payments.

Typically, borrowers must continue paying until they reach a loan-to-value ratio of 80 percent. While it may not help you cut down costs over the long-term, it certainly does provide short-term affordability for a Colorado mortgage.

According to Zillow, the average premium for PMI ranges between $30-$70 for every $100,000 borrowed, which could make it an affordable compromise for borrowers that can’t put down the full 20 percent.

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Tips to Save for a Colorado Mortgage Down Payment

Along with finding the best mortgage rates in Colorado, many new homeowners struggle with saving enough money for a sizable down payment.

If you don’t have savings already, the thought of putting aside thousands of dollars to get a better Colorado mortgage rate can seem overwhelming.

Below, we’ve compiled a few tips to help you save for a down payment and get the best Colorado mortgage rate.

Re-Examine Your Budget

While some expenses are non-negotiable, like rent or car insurance, sticking to a monthly budget can help you identify overspending in non-essential categories.

Free budgeting tools—like those from Mint and Personal Capital—will take your monthly expenditures and sort them into categories like food, restaurants, bars, and entertainment.

For example, if you find that you’re spending tons of money each month on dining out, you can use budgeting tools to decrease spending and allocate those savings towards your new Colorado mortgage fund.

mortgage rate in colorado

Denver, CO

Pick Up Additional Income

Earning additional income is a great way to increase your financial stability and build your down payment savings to lock in a great mortgage rate in Colorado.

There are plenty of stay-at-home job options to consider, or you can pick up a part-time job to supplement full-time income.

Make a commitment to apply additional income to your mortgage savings, and you will be in good shape to contribute a 20 percent down payment.

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Conclusion – Finding a Top Mortgage Loan for a Home in Colorado

Finding great mortgage rates in Colorado may take time, but the payoff is certainly worth the effort.

As you search for the best Colorado mortgage rates, consider the following questions:

  • Can I use local banks or credit unions for affordable Colorado mortgage rates?
  • Can I get better Colorado refinance rates from online-only lenders?
  • Which lenders offer competitive Colorado mortgage rates in Denver, Aurora, Lakewood, or Colorado Springs?

Ultimately, finding the best mortgage rates in Colorado comes from analyzing long-term affordability and partnership.

No matter which of the top Colorado mortgage lenders you choose, it’s important to partner with a financial institution that you trust and are comfortable working with throughout the length of your Colorado mortgage.

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