Mortgage Rates in Iowa City, Iowa — March 2026
Updated March 2026 | Based on Iowa City market data and regional lending conditions
Iowa City is a growing city in Iowa with a population of 74,828. The current 30-year fixed mortgage rate in Iowa City is 6.74%, which is 0.09% above the national average. With a median home price of $275,000 and a 20% down payment of $55,000, homebuyers can expect a monthly principal and interest payment of approximately $1,425.
Current Mortgage Rates in Iowa City, IA
Below are the current average mortgage rates available in the Iowa City area as of March 2026. Rates vary by lender, credit score, and loan-to-value ratio. Use our free calculator above to see your personalized estimate.
| Loan Type | Rate | National Avg | Difference |
|---|---|---|---|
| 30-Year Fixed | 6.74% | 6.65% | +0.09% |
| 15-Year Fixed | 5.98% | 5.89% | +0.09% |
| 5/1 ARM | 6.24% | 6.15% | +0.09% |
| FHA | 6.34% | 6.25% | +0.09% |
| VA | 6.14% | 6.05% | +0.09% |
| Jumbo | 6.94% | 6.85% | +0.09% |
Iowa City Housing Market Overview
The Iowa City housing market offers relatively affordable housing compared to many major cities. The median household income in Iowa City is $48,250, and the cost of living index is 95.5 (national average = 100). Based on the 28% affordability rule, you would need an income of approximately $76,500 to comfortably afford the median-priced home in Iowa City, which exceeds the current median household income.
Monthly Payment Breakdown for Iowa City
Based on the median home price of $275,000 with 20% down ($55,000), here is what you can expect to pay monthly in Iowa City:
15-Year vs. 30-Year Mortgage in Iowa City
Choosing a 15-year mortgage in Iowa City at 5.98% instead of a 30-year at 6.74% would save you $179,280 in total interest over the life of the loan. However, your monthly payment would be $1,854 instead of $1,425 — an increase of $429 per month.
Calculate Your Iowa City Mortgage Payment
Use our free calculator to get a personalized estimate based on your loan amount, interest rate, and term.
Open Free CalculatorFrequently Asked Questions About Mortgages in Iowa City
What are the current mortgage rates in Iowa City, IA?
As of March 2026, the average 30-year fixed mortgage rate in Iowa City, Iowa is 6.74%, while the 15-year fixed rate is 5.98%. FHA loans average 6.34% and VA loans 6.14%. These rates are 0.09% above the national average of 6.65%.
How much is a monthly mortgage payment in Iowa City?
Based on the median home price of $275,000 with 20% down, the estimated monthly mortgage payment in Iowa City is $1,425 for principal and interest. Including property taxes of $360/month, the total monthly housing cost is approximately $1,785.
What income do I need to buy a home in Iowa City?
Using the 28% rule, you would need an annual income of approximately $76,500 to afford the median-priced home in Iowa City at $275,000. The median household income in Iowa City is $48,250. This means most households would need to either earn above the median or consider homes below $275,000.
Is Iowa City a good place to buy a home in 2026?
Iowa City offers a below-average cost of living with a cost of living index of 95.5 (national average = 100). The property tax rate in Iowa is 1.57%, which is above the national average. Iowa City has a population of 74,828 and offers a balanced lifestyle.
Mortgage Rates in Other Iowa Cities
Related Tools & Guides
Last updated: March 2026. Rates are approximate averages based on regional lending data for the Iowa City, Iowa area. Individual rates may vary by lender, credit score, loan amount, and other factors. Use our free calculator for a personalized estimate.