Big home, big loan: What is a jumbo mortgage?

While every house-hunting journey probably begins with a budget, it’s important to start with a dream. And that dream can mean different things to different people. From location to space to features and feelings, your perfect home should match your vision.

But sometimes big dreams come with bigger price tags, leaving a dollar-sign-sized question in the process. That’s where jumbo loans come in. When your wants and needs outpace standard loan limits, jumbo mortgages can offer even more opportunities. But what is a jumbo mortgage, and what are the requirements? Here’s what you need to know!

What is a jumbo mortgage?

A jumbo mortgage is a lot like a conventional loan. The main difference is that the limit exceeds the federal conforming loan limit. While it’s often harder to get approved for a jumbo mortgage, it makes it more possible to buy large or luxury properties. Jumbo loans can also come with potential tax advantages and interest rates comparable to conventional loans, depending on market conditions and borrower factors.

What is the limit for a jumbo mortgage?

In most areas, the 2026 limit for a conventional conforming loan is $832,750.¹ It can also go as high as $1.249 million in some high-cost living areas. A jumbo mortgage is a loan that exceeds these conforming loan limits. The average cost of a home in Arizona is around $425,000,² so most homes are below the limit, but the jumbo mortgage can be a great option for higher-value properties that exceed conforming thresholds.

What credit score do I need for a jumbo mortgage?

While most lenders set the minimum at 700, a credit score of 740 or higher can get you the best possible rate. It’s also important to remember that it depends on your circumstances. Because more money is on the line with a jumbo mortgage loan, lenders often have stricter requirements. You might also be able to get a loan with a lower credit score, potentially even one in the mid-600s, but it may require a higher down payment or come with a higher interest rate.

Are jumbo mortgage rates higher than rates for a conventional mortgage?

This is another question that comes with the ever-so-satisfying answer to financial questions of “It depends.” Sometimes the rate is higher because lenders take on more risk with larger loans, especially with someone who has a lower credit score or lower down payment.

Other times, the rate can be competitive with or equal to rates for a conventional mortgage loan. If you put more down and have a higher credit score, you could get a more competitive rate. Lenders will also sometimes offer rates comparable to conventional loans to bring in more mortgage business and stay competitive in the market, potentially benefiting both sides.

How much do I need to put down for a jumbo mortgage?

In 2025, the median down payment on a home in America was $78,831, or 19% of the median sale price of a home at $414,900.³ While 19% can potentially be sufficient for a jumbo mortgage, some lenders may require closer to 25% or 30%. Still, it just depends on your circumstances. With high enough credit and the right lender, you may only need a down payment of 10%, but remember, a lower down payment will mean higher monthly payments. Those payments could also be significantly higher with a high-value home.

What debt-to-income ratio do I need for a jumbo mortgage?

When applying for a jumbo mortgage loan, a good debt-to-income ratio (DTI) to aim for is around 43%. That means that your monthly debt is 43% or less of your monthly gross income. Some lenders, however, will extend up to 50% in the right circumstances, but remember, calculating your DTI can help you just as much as it can help the lender. If your monthly debt obligation is already higher than 43%, taking on a substantial mortgage payment can mean even more of your take home pay is already spoken for.

Do jumbo mortgage loans require PMI?

While conventional mortgage loans typically do require private mortgage insurance (PMI) with a down payment of less than 20%, different lenders will have different requirements. This is also true when it comes to jumbo mortgage loans. Some lenders could allow you to get a loan without PMI, even if you put less than 20% down, but it will depend on your circumstances. It is important to know that you can potentially avoid PMI by putting down more than 20% or submitting a cancellation request to your lender once you have 20% equity in your home.

Make major homeownership goals possible!

Need more room, or even more rooms, but don’t know where to start? Learn more about mortgages and see how our team is always here to help you make the space for what matters most. Plus, we’ll help you explore options that make your goals feel more attainable. So, while you figure out the “what” and “where” of your perfect house, let us take care of the “how” by booking an appointment with one of our loan officers!