Last updated: October 5, 2026 · Rates and lender requirements are examples; they vary by lender.
If you are buying a higher-priced home, your mortgage may be too large for Fannie Mae and Freddie Mac to buy. That makes it a jumbo loan. Jumbo loans are common in expensive markets, but they come with stricter requirements that are worth understanding before you shop.
When you need a jumbo loan
A loan is “jumbo” when it is larger than the conforming loan limit set each year by the Federal Housing Finance Agency (FHFA). For 2026:
- $832,750 for a one-unit home in most of the country.
- Up to $1,249,125 in designated high-cost areas.
Limits are higher for 2- to 4-unit properties, and they are set by county, so check the limit where you are buying.
Typical jumbo requirements
Because these loans cannot be sold to Fannie Mae or Freddie Mac, each lender sets its own rules. Common requirements include:
- Credit score: often 700 or higher.
- Down payment: often 10% to 20%.
- Debt-to-income ratio: often 43% or lower.
- Cash reserves: often 6 to 12 months of mortgage payments left in savings after closing.
- Appraisal: sometimes two appraisals on very large loans.
Example: a $1.2 million home
| Scenario | Down payment | Loan | Monthly P&I (example rate) |
|---|---|---|---|
| Jumbo, 10% down | $120,000 | $1,080,000 | $7,004.86 at 6.75% |
| Jumbo, 20% down | $240,000 | $960,000 | $6,226.54 at 6.75% |
| Stay conforming | $367,250 (30.6%) | $832,750 | $5,263.55 at 6.5% |
With 20% down, a lender asking for 12 months of reserves would want to see about $74,719 left after closing, on top of the down payment and closing costs. With property tax at 1.1% and $3,600 a year of insurance, the total housing payment would be about $7,627 per month, which requires roughly $212,800 a year of income to stay at a 43% debt-to-income ratio with no other debts.
How to avoid a jumbo loan
- Put more down so the loan stays at or below the conforming limit.
- Use a piggyback loan: a conforming first mortgage plus a second mortgage for the rest. Compare the combined cost with a single jumbo loan. See second mortgage vs. refinancing.
- Check FHA or VA limits in your county if you qualify for those programs; see FHA vs. conventional.
Shopping tips for jumbo borrowers
- Compare banks, credit unions and mortgage lenders; jumbo pricing varies widely.
- Ask about relationship discounts for keeping assets with the lender.
- Consider whether an ARM or a fixed rate fits your plans.
- On a large loan, small rate differences are worth a lot; see what 1% extra interest costs and whether points are worth it.
Estimate your payment with taxes and insurance in our mortgage calculator.
Frequently asked questions
What is a jumbo loan in 2026?
A jumbo loan is a mortgage larger than the conforming loan limit set by the FHFA. For 2026, the baseline limit for a one-unit home is $832,750 in most of the U.S. and up to $1,249,125 in designated high-cost areas.
Are jumbo loan rates higher?
Not necessarily. Jumbo rates can be higher, similar or even lower than conforming rates depending on the lender and market conditions. Requirements, not rates, are usually the bigger difference.
How much do I need to put down on a jumbo loan?
Requirements vary by lender. Many look for 10% to 20% down, and some offer lower down payments to strong borrowers.
How can I avoid a jumbo loan?
Make a larger down payment to bring the loan under the conforming limit, or use a piggyback second mortgage so the first mortgage stays at or below the limit.
Sources: Federal Housing Finance Agency (FHFA), 2026 conforming loan limits; CFPB: Buying a House. Example calculations by ToolStackIA.
This article is for educational purposes only and is not financial advice. Loan programs, rates and rules change; confirm details with your lender or a HUD-approved housing counselor.