Jumbo mortgages are home loans that exceed conforming loan limits imposed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy mortgages from lenders.
In most (but not all) U.S. counties, any mortgage of more than $417,000 is a jumbo loan — and jumbo mortgages have higher interest rates than smaller loans. In about 200 counties with high home prices, borrowers are able to get mortgages for up to $625,500 without paying the higher jumbo interest rates.
There are perks to a jumbo mortgage. For example, jumbo loan rates have reached historic lows, and interest on loans up to $1 million is tax-deductible.
