What is a jumbo loan?

Each year, the Federal Housing Finance Agency sets limits on how much it will guarantee mortgage loans made by lenders.

You may need to borrow more than that, especially if you live in an area with high property values. That's why many lenders offer jumbo loans, which exceed the conforming loan limit set by the FHFA

Because they present a bigger risk to lenders, though, jumbo loans usually have stricter credit qualifications and require a larger down payment.

A jumbo loan (also referred to as a jumbo mortgage) is a home loan that exceeds the borrowing limits set by the FHFA. As a result, these loans aren't guaranteed by Fannie Mae or Freddie Mac.

Jumbo loans also have stricter approval requirements: You'll need a higher credit score, a larger down payment and a lower debt-to-income ratio than you would for a conventional loan. You may also face higher closing costs and show that you have a sizable cash reserve.

Jumbo mortgages can have terms of up to 30 years and come with either a fixed or adjustable rate.

Jumbo loans are designed for borrowers who require amounts exceeding the FHFA's conforming loan limit. In general, the limit in 2025 is $806,500. However, some areas with elevated home prices have limits up to $1,209,750.

The maximum you can borrow with a jumbo loan varies by lender. Wells Fargo offers jumbo loans for up to $10 million, among the highest in the industry. While the bank has scaled back its mortgage offerings, it has over 4,500 branches across 37 states.

Ally offers jumbo loans for up to $4 million, with no application, origination, processing or underwriting fees. You'll need a credit score of 680, a debt-to-income ratio of 40%, and a down payment of at least 20%.

Jumbo loans are considered "higher-priced mortgages," according to the Consumer Financial Protection Bureau, because they exceed the Average Prime Offer Rate, which is based on average interest rates, fees and other terms offered to highly qualified borrowers.

In September 2025, the average interest rate for a 30-year fixed jumbo mortgage was 6.39%%, according to Bankrate. For refinancing jumbo loans, the average was 6.57%.

Individual rates depend on the lender, as well as the cost of your home, your credit history, your debt-to-income ratio, and other factors.

Most lenders require a down payment of at least 10% of the home's value on a jumbo loan, although some may ask for up to 30% to mitigate their risk. If you put less than 20% down, you'll likely be required to have private mortgage insurance (PMI) until you have at least 20% equity in your house. 

Rocket Mortgage has a Jumbo Smart Loan available for up to $3 million, with a minimum down payment of 10.01% and no PMI required. Rocket is the largest mortgage originator in the U.S. and earns consistent praise for its customer service.

Since jumbo loans are not guaranteed by the FHFA, their  are significantly higher. Lenders typically require a FICO credit score of 700 or better to be approved for a jumbo loan.

In contrast, a credit score of 620 is sufficient for a conventional mortgage.

For a conventional loan, many lenders may still consider applicants with a debt-to-income ratio (DTI) as high as 50%. For jumbo loans, the DTI ceiling is much lower — typically no more than 43%.

You can calculate your DTI by adding up all of your total monthly debt payments and dividing that number by your gross monthly income.

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