A jumbo loan is any mortgage above the Fannie Mae/Freddie Mac conforming limit. For 2026 that is $766,550 in most of the country and up to $1,149,825 in 70+ high-cost counties (most of coastal California, NYC metro, DC metro, Hawaii, Alaska). Above those thresholds, Fannie and Freddie will not buy the loan — which means the lender has to hold it or sell it to private investors. That changes the pricing and the rules.
Worked example: $1.2M home, 20% down ($240K), $960,000 jumbo loan at 6.625% = $6,146/mo P&I. Add 1.1% tax ($1,100/mo) and $2,400/yr insurance ($200/mo) = $7,446/mo PITI. Income needed for 36% back-end DTI: about $20,700/mo gross, or $248K/year before any other debts.
How jumbo pricing differs from conforming
- Rate. Historically 0.25-0.5% higher than conforming. In 2023-2024 jumbos were often cheaper because banks wanted them on portfolio. In 2026, roughly flat or 0.125% higher.
- Down payment. 10% minimum at many banks, 20% at most. Portfolio banks like Bank of America and Chase sometimes accept 10.01% down on jumbo.
- Credit score. 700 floor, 740+ to get the best rates.
- Reserves. 6-12 months of PITI in liquid assets after closing. Much stricter than conforming.
- DTI. 43% hard cap at most jumbo lenders.
- Appraisals. Two appraisals required on loans over $1.5M at most lenders.
Structuring to avoid jumbo
If you are just over the conforming limit, consider a piggyback. Example: $900K home, 20% down ($180K), first mortgage of $720K (conforming), plus a $100K HELOC or fixed second (see home equity loan). You keep the first mortgage at conforming rate/terms. The second is at a higher rate but small balance. Often saves $2,000-$5,000/year versus a $810K jumbo.
Bank portfolio vs. agency jumbo
Big banks (Chase, BofA, Wells, Citi) keep jumbos on their books and underwrite to their internal rules. They love jumbos from private-wealth clients — the loan is a relationship product that comes with banking, investment, and trust business. Non-bank lenders (Rocket, Caliber, etc.) mostly sell to private aggregators. Bank jumbos tend to have lower rates for borrowers who bank there, while non-bank jumbos can be faster and more flexible.
High-balance conforming — the sweet spot
Many high-cost counties have a conforming ceiling between the base $766,550 and the high-cost $1,149,825. These "high-balance conforming" loans are technically conforming (Fannie/Freddie eligible) but carry a small pricing adjustment. They beat true jumbos on rate and flexibility. If your target loan is in that range, get quotes both as high-balance conforming and as jumbo — sometimes the spread is 0.25%.