Connecticut Mortgage Rates

Living in Connecticut

Connecticut spans just 110 miles from east to west and 70 miles from north to south, yet this small state — one of the most densely populated — is packed with attractions. They include dozens of historical sites, outdoor adventure parks, quintessential beach towns and, not surprisingly, a “chowda” trail for anyone interested in one of New England’s die-hard foods.

The Connecticut housing market has struggled lately due to factors such as weak job growth and slowing population growth. Meanwhile, much of the eastern U.S. had to slog through an unusually long winter, which did not help sales. In March, the median price for a single-family home in Connecticut was $243,000, a 1.6% decrease from the year before, according to The Warren Group, a New England-based real estate data company. Sales were down, too, dropping 4.7% in March, compared to the previous year.

This, of course, is good news for buyers. Still, homes in some parts of Connecticut are moving fairly quickly and selling for close to asking price. During the first quarter of this year, single-family homes in the greater Hartford area, for example, stayed on the market an average of 80 days, versus 91 days the year before. In March, they also sold for 98.1% of list price.

Lately, the Connecticut condominium market has perked up. In March, sales were up 2.2% over the past year, while the median price edged up 0.6%, to $163,500, according to the most recent numbers from The Warren Group.

The rules and costs of buying a home in Connecticut

The regulations and laws for buying a home vary from state to state, as do the taxes buyers and homeowners will need to pay. Here’s what you need to know about buying a home in Connecticut:

Home seller and buyer laws

State law requires sellers to fill out a property disclosure form to reveal issues that might affect a home’s value or marketability. The form asks for general information and details on specific parts of the home, such as walls and foundation, improvements and internal systems for water, sewage, heating and electricity. The disclosure form encourages sellers to explain potential issues in detail and attach relevant documents.

According to Connecticut law, sellers are required to give buyers the form before they sign a contract: Otherwise, buyers are entitled to a $500 refund at closing. Meanwhile, state law also requires licensed real estate brokers to provide buyers with any significant information they have on the home’s condition.

Connecticut is a judicial foreclosure state, which means lenders must work with a court before foreclosing on a consumer’s home.

As a buyer, you should also know that Connecticut is an equitable distribution state. This means that in the event of a divorce, a court will be required to divide assets, including real estate, and debts among spouses fairly, but not necessarily with a 50/50 split, as is the case in community property states. Instead, Connecticut courts consider factors such as the length of the marriage, reason for the divorce and the age and earning potential of each spouse.

In Connecticut, attorneys typically attend home closings because state law requires them to verify the title is valid and handle anything else that might qualify as a legal matter. This is different from so-called escrow states, which allow an escrow company or title insurance firm to handle the closing of a home sale.


In Connecticut, any property sale over $2,000 requires the seller to pay a transfer, or “conveyance,” tax that allows the property to change hands. The tax is collected both by the state and local municipality, and it now ranges from 1% to 1.75% of the sales price, depending on the property and its location.

As a homeowner, you are responsible for paying any property taxes due annually on your home. According to, Connecticut has one of the highest property taxes in the country, with a median tax of $4,738 for a $291,200 home.

Tax rates vary by county, so if you’re thinking of buying in Connecticut, check with the tax assessor in the area to get your actual rate. Residents in Fairfield County, along the New York border, pay more taxes than the rest of the state — $6,221 on average. By contrast, residents in Windham County, in the northeastern corner of the state, pay the lowest, an average of $2,970 per year.

As a Connecticut homeowner, you may be able to trim your annual property tax bill through some of the tax exemptions, credits or abatements (actual reductions in tax due) offered statewide or through cities and towns. For example, the state offers a tax credit for low-income seniors and disabled people and tax exemptions for veterans and others who are legally blind or disabled. Check with your local municipality for more information.

Conforming loan limits

The conforming loan limit for a single-family home in most of Connecticut is $484,350, which is the limit in place for most of the U.S. Only one county — Fairfield County — has a higher conforming loan limit of $601,450.

A conforming loan limit represents the maximum amount borrowers can receive for a conventional mortgage that Fannie Mae and Freddie Mac, two government-sponsored entities, are willing to insure. With a conforming loan, buyers who have good credit usually get the best interest rates. If you’re looking to buy a very expensive home — with a mortgage that goes over the limit in your area — you’ll most likely need a jumbo loan. These loans often come with higher interest rates and stricter lending qualifications.

Programs for homebuyers in Connecticut

The Connecticut Housing Finance Authority (CHFA) offers residents 11 statewide homebuyer programs with various features, including mortgages at below-market interest rates and down payment assistance. Some CHFA programs are targeted toward specific types of buyers, such as veterans and military members, teachers, police officers and those who are disabled. Help is also available for tenants of public housing or those looking to purchase a manufactured home.

Some CHFA programs are highlighted below; go here to see details on every program. Meanwhile, if you’d like to know more about local homebuyer programs in Connecticut — such as those offered by cities and towns — visit this website from the U.S. Department of Housing and Urban Development (HUD).

HFA Advantage / HFA Preferred Loan

These programs offer conventional mortgages with low mortgage insurance costs and below-market interest rates to low- and moderate-income buyers. Borrowers automatically qualify for down payment assistance in the form of a second mortgage of at least $3,000, which typically is provided at the same interest rate (see the description for the DAP loan below). The HFA Preferred Loan may be used to buy an owner-occupied, multifamily home.

Who qualifies:

  • Borrowers must be first-time homebuyers or have not owned a home in the past three years (this requirement is waived if buyers are purchasing in a federally designated target area)
  • Buyers must meet income guidelines, based on location
  • Purchase price limits apply
  • Home must be primary residence
  • Buyers must attend a homebuyer education class

Homebuyer Mortgage Program

This program offers government-insured mortgages with below-market interest rates and down payment help through the DAP loan described below.

Who qualifies:

  • Borrowers must be first-time homebuyers or have not owned a home in the past three years, unless buying in a targeted area
  • Buyers must meet income guidelines, based on location
  • Purchase price must be within program limits
  • Home must be primary residence
  • Buyers must attend a homebuyer education class

Downpayment Assistance Program (DAP)

This program offers a low-interest second mortgage to help pay down payment costs. The loan amount must be at least $3,000 but no more than the minimum down payment required for your home.

Who qualifies:

  • Buyers must finance their home with a CHFA first mortgage and meet that program’s eligibility requirements
  • Buyer must attend a homebuyer education class

Rate shopping tips

Making sure you have your best interest rate on your mortgage could save you thousands of dollars over the life of the loan. Follow these tips to get the lowest rate possible.

Contact at least three lenders on the same day

Interest rates fluctuate daily, so it’s best to get your quotes all on the same day. Also, to ensure you’re getting competitive rates, get quotes from multiple types of lenders, including national banks, small regional community banks, credit unions and online lenders.

Give each lender the same information

When prequalifying or applying for a mortgage, make sure you give complete details that are exactly the same about your financial situation to each lender. You want to avoid receiving a low initial rate that may increase because of incorrect information on your application.

Add up all lender fees to confirm the costs

Besides comparing interest rates between lenders, you’ll also want to look at the fees each lender charges to process and close your loan. To see these fees, check the loan estimate lenders are required to provide you within three days of receiving your application. Lender fees vary widely, but look for fees like those to process your application, underwrite your loan, get a property appraisal, as well as any discount points your lender may charge in exchange for a lower interest rate.

When comparing interest rates for loans, ask for the annual percentage rate (APR) for each loan, too, to get a more complete look at the yearly cost of financing. At the same time, check to see which lender fees may not be reflected in the APR, such as an appraisal or credit report fee.

Know when to lock in the rate

Consider locking in your rate to prevent it from increasing before you close on your home. Most rate locks are good for 30 to 60 days, and some lenders may charge a fee. Also ask for a possible “float down” for your loan if market mortgage rates decrease. Your loan officer should be able to provide perspective on which way rates are headed.

The information in this article is accurate as of the date of publishing.