If you’ve been scrolling through Zillow at midnight or stalking Redfin notifications for a decent-looking house in North Park, you’ve probably noticed the vibe in San Diego has shifted. For the last couple of years, the market felt like it was holding its breath. Everyone was waiting for that "magic" drop in interest rates that would suddenly make a $900,000 bungalow affordable.
Well, it’s early 2026, and we aren't waiting anymore. We’re in it.
Current mortgage rates San Diego are finally hovering around that psychological "tipping point" of 6%. As of mid-January 2026, you’re looking at a 30-year fixed rate averaging roughly 6.06%, with some local credit unions like MyPoint or Mission Fed occasionally teasing numbers closer to 5.75% or 5.87% if you’ve got a stellar credit score and a chunky down payment.
But here’s the thing: most people are looking at these numbers all wrong. They’re comparing them to the "unicorn" 3% rates of 2021, and that’s a trap.
The 6% Barrier and the "Golden Handcuffs"
For a long time, San Diego was stuck in what economists called the "lock-in effect." Basically, if you bought a house in Scripps Ranch in 2020 with a 2.8% rate, why on earth would you sell it to buy a similar house in Poway at 7.5%? You wouldn't. You’d stay put.
That kept inventory at historic lows.
But 6%? Honestly, 6% is different. It’s the threshold where the math starts to actually make sense for a lot of families. We’re seeing a "gentle exhale" in the market. People are finally willing to trade their 3% rate for a 5.9% rate if it means getting out of a cramped condo and into a yard for the kids.
Why San Diego Rates Are Doing Their Own Thing
While national averages give you a ballpark, San Diego is a unique beast. We have a massive military presence, a biotech sector that’s basically its own economy, and a chronic lack of dirt to build on.
- Jumbo Loan Shifts: Because our "median" home price is nearly $930,000, many buyers are in Jumbo loan territory. Interestingly, Jumbo rates in San Diego are currently sitting around 6.25% to 6.40%, often slightly higher than conforming loans because the secondary market for these large loans is a bit more sensitive to global uncertainty.
- The Federal Boost: Late last year, federal interventions—specifically the order for agencies to buy up billions in mortgage bonds—actually helped pull rates down from the 7s. That’s why we saw that sudden dip to the high 5s for some buyers last week.
- Conforming Limits: For 2026, the conforming loan limit for San Diego County has climbed to $1,104,000. This is huge. It means you can borrow over a million bucks without hitting those steeper "Jumbo" requirements, which helps keep the monthly payment just a bit more manageable for the average professional couple.
What Lenders Aren’t Telling You Right Now
If you talk to a big national bank, they’ll give you a standard quote. But in San Diego, the "real" rate you pay is often determined by things you might not expect.
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Points are back in a big way. I’m seeing many local buyers pay 1.5 to 2 points upfront just to secure a rate in the mid-5s. Is it worth it? Maybe. If you plan on staying in the house for 10 years, paying that $10,000 to $15,000 upfront to save $300 a month pays for itself eventually. But if you think you’ll refinance in 24 months when (or if) rates hit 5%, you might be throwing that money away.
Also, don't sleep on the "10-year Equity Loan" or ARMs. While most people are terrified of Adjustable Rate Mortgages because of 2008, a 7/6 ARM is currently sitting around 5.75%. If you know you're going to move for work in five years anyway, why pay the "security tax" of a 30-year fixed rate?
Real Numbers: The San Diego Reality Check
Let's look at a real-world scenario. Say you find a place in Claremont for $950,000.
If you put 20% down ($190,000), you’re financing $760,000.
At last year’s 7.25% rate, your principal and interest was roughly **$5,185**.
At today’s 6.06% rate, that same loan is about $4,585.
That’s $600 a month back in your pocket. In San Diego, that’s your grocery bill, or half your SDG&E bill in the summer. It’s a massive difference in "feel-good" affordability.
The Counter-Intuitive Risk of Waiting
There is a very loud group of people on social media saying, "Wait until rates hit 5%!"
It sounds smart. But in San Diego, it’s often a losing strategy. Our inventory is still down about 50% compared to historical norms. The second rates hit 5.5%, every buyer who has been sitting on the sidelines for two years is going to bum-rush the market.
What happens then? Bidding wars.
We saw it in 2021. You might save 0.5% on your interest rate, but you’ll end up paying $50,000 over asking price just to win the house. If the house appreciates at 4% while you wait six months for a lower rate, you’ve already lost the game.
Who is Winning in This Market?
- VA Buyers: If you’re military (and there are 115,000 of you here), VA rates are currently stellar—often around 5.6%. With zero down, this is the only way many people are cracking the San Diego market right now.
- First-Time Buyers: Programs like the "3/27" loans from local credit unions are helping people get in the door with slightly lower introductory rates.
- Refinancers: If you were forced to buy in late 2023 or 2024 when rates peaked near 8%, now is your window. If you can drop your rate by 1% or more, the closing costs usually pay for themselves within 18 to 24 months.
Practical Steps to Navigate San Diego Mortgages Today
Stop looking at the national news. It doesn't apply to a 1,200-square-foot house in Mira Mesa. Instead, focus on these specific moves:
Check the local Credit Unions first. Institutions like San Diego County Credit Union (SDCCU) or North Island often have "portfolio" loans. This means they keep the loan on their own books rather than selling it to Fannie Mae. Because they aren't following the "standard" rules, they can sometimes offer you a better rate or more flexible terms that a big bank won't touch.
Get a "Full" Underwritten Pre-Approval. A simple pre-qualification letter isn't worth the paper it's printed on in a competitive market. Get a lender who will actually run your files through underwriting before you find a house. When you find that perfect place in South Park, being able to close in 17 days instead of 30 is a bigger flex than a slightly lower rate.
Watch the 10-Year Treasury. If you want to know where rates are going next week, don't look at the Fed. Look at the 10-Year Treasury yield. Mortgage rates generally follow it. If the yield is dropping, your lender should be dropping their daily rate.
Inventory is the real enemy. Even with better rates, the fact remains that there just aren't enough houses. Expect to see homes sitting for about 35–40 days on average, but the "good" ones—the ones with the updated kitchens and the ADU potential—are still going in under two weeks.
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Ultimately, 2026 is becoming the year of "normalization." We’re moving away from the chaos of 8% and the fantasy of 3%. We are landing in a spot where you can actually plan a future. It's not "cheap," but for the first time in a long time, it feels possible.
Your Next Move:
Reach out to a local San Diego mortgage broker—not a call center—to run a "Total Cost Analysis" comparing a 30-year fixed, a 7-year ARM, and a 30-year with bought-down points. Ask specifically for a breakdown of how the new $1,104,000 conforming loan limit affects your specific price range, as staying under this cap can save you thousands in interest over the life of the loan.