Jumbo loan limits 2023: What you need to know

What we'll cover

Homes aren’t one-size-fits-all, and neither are mortgages. Just like families may need more space as they grow, a larger property may require a heftier mortgage than a smaller home with a lower price tag. A jumbo loan could fit you like a glove If you’re buying a costlier home and need to borrow more than the conforming loan limits allow.  

Whether you’re looking to purchase an upscale property or simply one in an area with a high cost of living, here’s what you need to know about the 2023 jumbo loan limits. 

Essentially, a jumbo loan  is a mortgage that exceeds baseline amounts set by Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) guidelines. Since jumbo loans do not have upper limits established by the agencies mentioned, it’s up to your lender to determine the ceiling amount for jumbo loan limits.

A jumbo mortgage can be used to finance primary homes, vacation homes, and investment properties. Like a standard mortgage loan, jumbo loans can also be refinanced to adjust term length, lower the rate, or (for primary residences) take out cash. 

If you are wondering whether you’ll need a jumbo loan, you need to consider the limits set for conforming loans. The agency-set maximum limits for these loans provide a baseline for jumbo loans. 

Most parts of the country have one maximum loan amount for conforming loans. In some high-cost areas, such as Washington D.C. and certain California counties, the threshold for the maximum conforming loan is higher.

Lenders will also look for a reliable, steady income. This is because they want to know you can afford the higher monthly payments and often higher interest rates that come with jumbo loans as opposed to traditional mortgages.

Like with most loans, you have to pay interest in exchange for the jumbo mortgage amount lent by your financing company. Your rate may be fixed or adjustable, depending on the terms and mortgage type you choose. Rates can vary and are influenced by individual factors and Federal Reserve benchmarks.

Interest rates for jumbo loans change daily. You can visit Bankrate to view current jumbo loan interest rates .

Now that you know more about jumbo loans and their limits for 2023, you can begin to determine if it’s the right mortgage choice for you. Whether you already know you’ll need a jumbo mortgage or you’re still in the process of searching for a property, you’ll want to shop around for the right jumbo loan as well.  

Be sure to research multiple lenders to compare factors including loan requirements and interest rates. You’ll also want to examine the loan terms that are offered to ensure you find a lender that fits your needs and timeline. It’s typically a good idea to get mortgage pre- approval or apply to at least three lenders to receive multiple loan estimates so you can be sure you are ready to buy when it’s time for closing.   

If you are in the market for a bigger home, you might also be in the market for a jumbo mortgage. So, as you conduct your home search, keep an eye on current jumbo loan limits as they can change annually. Talking to a jumbo loan expert can help you decide if you should go big with your mortgage in order to go home.