Where rates sit right now, what each major loan type actually offers, and where Tennessee's own down payment assistance program fits in.
KEY TAKEAWAY
As of mid-August 2026, the 30-year fixed averages about 6.6%, the 15-year fixed about 6%, and 5/1 ARMs about 6.5%. Conventional loans fit strong-credit buyers, FHA and USDA lower the entry bar, VA serves eligible veterans with zero down, jumbo covers anything above roughly $832,750, and Tennessee's THDA program can add up to $30,000 in down payment assistance.
Where Mortgage Rates Actually Stand Right Now
As of mid-August 2026, the average 30-year fixed mortgage rate is running about 6.6% APR, the 15-year fixed is averaging right around 6%, and 5/1 adjustable-rate mortgages are pricing near 6.5%. Those are national averages pulled from Freddie Mac, Bankrate, and NerdWallet, not a quote for any specific buyer, your actual rate depends on credit score, down payment size, loan amount, and the lender you use.
The bigger-picture context matters more than the daily number. Rates have spent this summer range-bound in the mid-6% band rather than making the sharp moves that defined 2022 and 2023. That stability is exactly why the loan type and structure you choose now carries more weight than trying to time a rate that isn't moving much either way.
What Moves the Rate You're Actually Quoted
Two borrowers shopping the same day can be quoted meaningfully different rates. Credit score, loan-to-value ratio, debt-to-income ratio, property type, and even whether you're buying a primary residence versus an investment property all factor in before a lender gives you a real number. Treat any rate you see in an article, including this one, as a starting point for a conversation with a lender, not a guarantee.
LOCAL INSIGHT
Nashville's price divergence by submarket, luxury inventory loosening while entry-level stays tight, means the loan type that makes sense in Brentwood is often a different animal than the one that makes sense in Nolensville or Rutherford County.
Conventional and FHA: The Two Most Common Starting Points
Conventional loans made up roughly 51% of mortgage applications in mid-2026, and they're the default most buyers with solid credit end up in. A conventional loan isn't backed by a federal agency, but most follow Fannie Mae or Freddie Mac guidelines to qualify as conforming loans, which keeps pricing competitive. The 2026 conforming loan limit is $832,750 for a single-family home, up to $1,249,125 in higher-cost areas. Buyers with a 620-plus credit score can put as little as 3% down, and private mortgage insurance comes off once you reach 20% equity.
The trade-off is qualifying standards. Lenders carry the full risk on a conventional loan, so credit, income, and debt requirements tend to run stricter than a government-backed alternative.
FHA: The Lower Bar, With a Permanent Cost
FHA loans, insured by the federal government, made up about 34% of applications this year, the second most common path. The appeal is real: 3.5% down and more forgiving credit requirements open the door for buyers who can't clear a conventional loan's bar yet. The cost that's easy to underweight is mortgage insurance premium, which on most FHA loans lasts for the life of the loan rather than dropping off at 20% equity the way conventional PMI does. In competitive listing situations, some sellers also weigh FHA offers against conventional ones because of FHA's stricter appraisal standards, worth knowing if you're using FHA financing in a multiple-offer scenario.
The lowest advertised rate and the right loan for you are two different questions, and only one of them actually determines your payment.
VA, USDA, and Jumbo: The Loans Built for Specific Situations
Three more loan types cover buyers conventional and FHA don't fit well.
VA Loans
For eligible veterans, active-duty service members, and some surviving spouses, VA loans are arguably the strongest loan product on the market: zero down payment and no mortgage insurance at all, backed by the Department of Veterans Affairs. VA loans made up about 14% of applications in 2026. The trade-off isn't really a downside so much as a limitation, it's only available to those who qualify through military service, and most borrowers pay a funding fee unless they're exempt.
USDA Loans
USDA loans extend zero-down financing to buyers in eligible rural and suburban areas, with lower mortgage insurance costs than FHA. More of Middle Tennessee qualifies as USDA-eligible than most buyers assume, it isn't limited to farmland, plenty of suburban and exurban addresses outside Nashville's urban core clear the map. The catch is a longer approval process, with additional documentation and a USDA review step layered on top of standard underwriting, plus geographic and household income limits that rule out a lot of in-demand submarkets.
Jumbo Loans
Anything above the conforming limit, $832,750 nationally, $1,249,125 in higher-cost areas, needs a jumbo loan, which matters more in Nashville than it used to given how much of the region's luxury and even upper-mainstream inventory now clears that line. Jumbo loans can't be sold to Fannie Mae or Freddie Mac, so lenders hold more of the risk directly, which shows up as stricter requirements: typically 680-plus credit and 10% to 20% down, versus the more forgiving thresholds on a conforming loan.
Quick Stats
30-Year Fixed
Averaging about 6.6% APR as of mid-August 2026, per Freddie Mac and Bankrate data.
15-Year Fixed
Averaging about 6% APR, roughly half a point below the 30-year rate.
THDA Assistance
THDA Great Choice Plus offers up to $30,000 in down payment assistance on a $500,000 home, deferred at 0% interest.
Loan Mix
Conventional loans made up about 51% of 2026 mortgage applications, FHA about 34%, and VA about 14%.
Fixed vs. Adjustable: The Structural Choice Underneath the Loan Type
Loan type answers who backs the loan and what the down payment looks like. Rate structure, fixed or adjustable, is a separate decision that applies across most of those loan types.
Fixed-Rate: Pay for Predictability
A fixed-rate mortgage locks the interest rate for the full loan term. The principal and interest portion of the payment never changes, which makes multi-year budgeting straightforward and removes any exposure to future rate moves. It's the right default if you plan to stay in the home seven or more years, or if your budget doesn't have room to absorb a payment increase later.
ARM: Pay for Lower Payments Now
Most adjustable-rate mortgages sold today are hybrids, a fixed period of 5, 7, or 10 years at a lower introductory rate, followed by annual adjustments tied to market conditions. The appeal is real buying power: a rate even a percentage point below the fixed option can mean a meaningfully lower payment during the fixed window. The real risk is what happens when that window ends, if rates are higher when your ARM adjusts, the payment increase can be significant, sometimes called payment shock. An ARM makes sense mainly if you're confident you'll sell or refinance before the fixed period runs out, not as a way to stretch into a house you couldn't otherwise afford long-term.
BEST FOR
Buyers comparing loan types and rate structures before they start shopping lenders, especially first-time buyers weighing THDA assistance against a standard conventional path.
Tennessee's Own Down Payment Assistance: THDA Great Choice
One option that's easy to miss because it's state-specific rather than something every lender advertises: the Tennessee Housing Development Agency's Great Choice Loan. It's a 30-year fixed-rate mortgage, often priced below the broader market, available statewide to eligible buyers.
Great Choice Plus: Up to $30,000 in Assistance
Paired with the base loan, Great Choice Plus provides down payment assistance up to 6% of the purchase price, up to $30,000 on a $500,000 home. It's structured as a second mortgage at 0% interest with no monthly payment, deferred until you sell, refinance, or pay off the first mortgage. That structure makes it meaningfully different from a grant, it's real money you'll eventually repay, just not on a monthly schedule that competes with your primary payment.
Who Actually Qualifies
THDA requires a minimum 640 credit score and a completed homebuyer education course, plus income and purchase price limits that vary by county. For Nashville and the surrounding counties Houstonopolis covers most, Davidson, Williamson, Rutherford, Wilson, Sumner, and Robertson, the 2026 purchase price limit sits at $475,000. Worth being direct about this: that cap sits well under the median sale price in Brentwood and several other Williamson County submarkets right now, so THDA is a real tool for entry-level and mid-market buyers in this region, not a program most luxury or move-up buyers will qualify to use.
TIP
Ask any lender you're comparing for the APR, not just the interest rate. APR bakes in lender fees and points, which is what actually makes two quotes comparable apples to apples.
The Takeaway
The rate headline changes daily and matters less than most buyers assume. What actually sets your payment is the loan type you qualify for, whether you choose a fixed or adjustable structure, and whether a program like THDA Great Choice Plus is on the table for your purchase price and county. Get those three decisions right before you fixate on whether today's rate is a tenth of a point better than last week's.
If you're weighing your options for a Middle Tennessee purchase, a conversation with a local lender and a REALTOR® who knows how these programs actually apply county by county is worth more than another rate-tracking article. Reach out to Houstonopolis Creative and we'll point you toward lenders and next steps that fit your specific search.
What credit score do I need to buy a house in Tennessee?
It depends on the loan. Conventional loans generally want 620 or higher, FHA can go lower, VA has no official minimum though lenders often set their own floor, and THDA's Great Choice program requires at least 640.
Is an FHA loan a bad idea if I can qualify for conventional?
Not automatically, but it's worth running the numbers. FHA's mortgage insurance typically lasts the life of the loan, while conventional PMI drops off at 20% equity, which usually makes conventional the better long-term math if you can qualify for it.
Do I have to be a first-time buyer to use THDA?
Not always, some THDA programs are limited to first-time buyers, but Great Choice has options for repeat buyers in certain targeted counties. Eligibility depends on the specific program and county, so it's worth confirming directly rather than assuming.
Is now a good time to lock a rate or wait?
Nobody can reliably time the exact bottom. Rates have been range-bound in the mid-6% band for months rather than trending sharply in either direction, which is a reasonable environment to focus on loan structure and qualification instead of waiting for a dramatically better number.
Can I combine a jumbo loan with THDA assistance?
No. THDA's programs come with purchase price limits well below jumbo territory, so buyers in that price range are working with conventional or jumbo financing on standard terms.
