Why the 30-Year Fixed Is California’s Most Popular Mortgage

As a home buyer in California, you have many different options when it comes to your mortgage financing.

But when it comes to overall popularity, there’s one type of mortgage loan in California that rises above all others. It’s the 30-year fixed-rate conventional home loan.

1. The 30-year fixed-rate conventional mortgage is the most popular home loan in California.
2. This type of loan has three key components: a 30-year term, a fixed interest rate, and a conventional (non-government-backed) structure.
3. Its popularity is driven by benefits like lower monthly payments, long-term stability, and the ability to avoid or reduce mortgage insurance costs.
4. Borrowers using this loan may qualify for a more expensive home while keeping payments manageable, which is valuable in California’s high-cost housing market.
5. While this loan suits many buyers, it’s important to explore all financing options to find the best fit for individual needs.

The Most Popular Mortgage in California

A California Association of Realtors report from a couple of years ago showed that 83% of home loans in California had a fixed interest rate (rather than adjustable). Additionally, about 75% of loans had a 30-year repayment term.

And according to a March 2025 report from the Mortgage Bankers Association:

“By product type, conventional loans composed 56.7 percent of loan applications, FHA loans composed 32.1 percent, RHS/USDA loans composed 0.6 percent and VA loans composed 10.6 percent.”

Put these different components together, and you have the 30-year fixed-rate conventional loan, the most popular type of mortgage in California by far.

Breaking Down the 30-Year Fixed-Rate Loan

The 30-year fixed-rate conventional mortgage loan has three specific components that make it different from other financing options.

It has a 30-year amortization or repayment term, a fixed interest rate that does not change, and a conventional designation that distinguishes it from programs like FHA and VA.
Here’s what those three components mean for you, as a borrower:

• Thirty years: With a 30-year mortgage, the borrower has 30 years, or 360 months, to repay the loan in full. (Though most people these days either sell or refinance long before that.) This extended repayment period allows borrowers to spread their payments over a longer time frame, resulting in lower monthly payments.
• The fixed rate: The interest rate remains constant or “fixed” for the entire duration of the loan. When a borrower secures a 30-year fixed-rate conventional mortgage, they agree to a specific interest rate that will not change over the life of the loan, regardless of fluctuations in the market.
• The conventional aspect: The term “conventional” refers to the type of mortgage loan being utilized. A conventional mortgage is not guaranteed or insured by any government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).

The Benefits for Borrowers

The 30-year fixed-rate conventional mortgage loan is the most popular financing option for a reason. While it might not be the best choice for every situation, it does offer distinct advantages that appeal to a large number of borrowers.

Here are some of the most important benefits for California home buyers:

1. Smaller monthly payments

By spreading the mortgage loan over a lengthy 30-year term, borrowers are able to reduce the size of their monthly payments.

On the other hand, those who choose a shorter repayment term, like the 15-year mortgage, will end up with a significantly larger monthly payment.

This feature makes the 30-year option ideal for California home buyers who want to minimize their monthly payments.

2. Increased buying power

Lower monthly payments can also make homeownership more affordable. With a 30-year mortgage, borrowers may be able to purchase a more expensive home while still maintaining manageable monthly payments.

This can be particularly beneficial for home buyers who live in expensive real estate markets, which includes most cities in California.

3. Stable and predictable

A 30-year fixed-rate conventional mortgage loan lives up to its name by having a “fixed” interest rate for the entire life of the loan. This means your interest rate will never change (unless you were to refinance down the road).

An ARM loan, on the other hand, has an interest rate that can change over time, bringing more uncertainty into the picture.

Many home buyers in California choose the 30-year fixed option for the long-term stability and predictability it offers.

4. Avoiding mortgage insurance

FHA loans require borrowers to pay an upfront and annual mortgage insurance premium. This can increase the size of the monthly payments. But with a conventional loan, borrowers can avoid mortgage insurance as long as the loan-to-value ratio does not exceed 80%.

5. Cheaper mortgage insurance

Borrowers who use a conventional loan with less than a 20% down payment often have to pay for private mortgage insurance, or PMI. But even in those cases, PMI tends to be cheaper than the mortgage insurance associated with the FHA program (mentioned above).

Basic Qualifications for Borrowers

The qualification requirements for a 30-year fixed-rate home loan are generally the same as those for other mortgage products. Here is some of what you can expect when applying for this type of loan.

• Credit Score: Most lenders require a minimum credit score of around 620, but this can vary. A higher score could help you qualify for a better interest rate.
• Down Payment: The minimum down payment for a conventional home loan in California typically ranges from 3% to 5% of the purchase price. A down payment of 20% or more will allow you to avoid paying mortgage insurance.
• Debt-to-Income Ratio: Your monthly debts, including the future mortgage payment, should generally be below 45% of your gross income.
• Steady Employment and Income: Lenders look for proof of stable, verifiable income (such as recent pay stubs, W‑2 forms, or tax returns). Ideally, you’ll have at least two years of steady employment.
• Property Appraisal: The home you want to buy must undergo an appraisal to determine its market value. The property should be worth at least as much as the sale price.
• Documentation: Be prepared to provide financial documents that verify your income, assets, debts, and credit history. Much of this can be done electronically.

But Is It the Right Option for You?

When it comes to mortgage financing, different borrowers have different needs and objectives.

For some people, minimizing the monthly payments is the top priority. Other borrowers might put an emphasis on reducing the total amount of interest paid over time.

This is why it’s so important to explore all of your options, before making a final decision.

As a California mortgage broker, we can help you choose the right type of loan for your particular situation. We offer a broad range of mortgage options, including everything mentioned in this article.