Tennessee Mortgage Rates & What Affects Your Rate in 2026
Current Tennessee mortgage rates, how to get the best rate, and what factors lenders use to determine your rate.
Current Tennessee Mortgage Rates
As of early 2026, average mortgage rates in Tennessee:
| Loan Type | Rate Range | |-----------|-----------| | 30-year fixed | 6.5% - 7.2% | | 15-year fixed | 5.8% - 6.5% | | 5/1 ARM | 5.5% - 6.3% | | FHA 30-year | 6.2% - 6.9% | | VA 30-year | 6.0% - 6.7% |
Rates vary by lender, credit score, down payment, and loan amount. Getting quotes from 3-5 lenders typically saves 0.25-0.5% on your rate.
What Determines Your Rate
Credit Score (Biggest Factor)
| Score | Typical Rate Premium | |-------|---------------------| | 760+ | Best available rate | | 720-759 | +0.125% | | 680-719 | +0.375% | | 640-679 | +0.75% | | Under 640 | +1.5% or denial |
The difference between a 680 and 760 score on a $400K mortgage: $150/month or $54,000 over 30 years.
Down Payment
- 20%+: Best rates, no PMI
- 10-19%: Slightly higher rates + PMI ($100-300/month)
- 3.5% (FHA): Higher rates + mortgage insurance for the life of the loan
Loan Type
- Conventional: Best rates for strong borrowers
- FHA: Lower requirements, slightly higher rates
- VA: Often the best rates (for veterans)
- USDA: Zero down for rural areas, competitive rates
Debt-to-Income Ratio
DTI above 36% means higher rates. Above 43% and many lenders won't qualify you at all.
How to Get the Best Rate in Nashville
- Check your credit 90 days before applying — dispute errors, pay down cards
- Get quotes from at least 3 lenders — online lenders, local banks, credit unions
- Compare on the same day — rates change daily
- Ask about rate locks — lock your rate for 30-60 days once you find a good one
- Consider buying points — pay 1% of loan amount upfront to reduce rate by ~0.25%
Tennessee-Specific Programs
- THDA Great Choice: Below-market rates for first-time buyers
- THDA Homeownership for the Brave: Additional assistance for veterans
- Down payment assistance: Up to $15,000 in forgivable grants
Start Here
Take our free quiz to get matched with lenders who offer the best rates for your specific situation. No obligation, no hard credit pull.