Credit Union vs Bank Mortgages: Which is Better in Massachusetts?

October 20, 2025 • 5 min

When shopping for a mortgage in Massachusetts, one of the first decisions you'll face is whether to work with a traditional bank or a credit union. While both offer home loans, there are significant differences that could save you thousands of dollars over the life of your loan.

Key Differences Between Credit Unions and Banks

1. Lower Interest Rates

Credit unions typically offer mortgage rates that are 0.25% to 0.5% lower than traditional banks. On a $400,000 30-year mortgage, a 0.5% lower rate could save you over $40,000 in interest payments. This happens because credit unions are nonprofit organizations owned by their members, allowing them to pass savings directly to borrowers.

2. Reduced Fees

Credit unions generally charge lower origination fees, application fees, and closing costs compared to banks. Massachusetts credit unions often waive certain fees for members, which can save you $1,000 to $3,000 upfront.

3. More Flexible Underwriting

Credit unions tend to be more flexible with their lending criteria. If you have a unique financial situation, such as self-employment income or a lower credit score, credit unions may be more willing to work with you than traditional banks.

4. Personalized Service

With credit unions, you're working with local decision-makers who understand the Massachusetts housing market. Many borrowers report better customer service and more personal attention throughout the mortgage process.

When Banks Might Be Better

Banks can be advantageous if you need a very large loan (jumbo mortgage), want access to a wider variety of loan products, or prefer the convenience of having all your financial services in one place. Large banks also typically have more branches and may offer more robust online tools.

How to Choose

The best approach is to get quotes from both credit unions and banks. Use our rate comparison tool to see current offers from Massachusetts credit unions, and compare them with bank quotes you receive. Also use our refinance calculator to see potential savings.

Massachusetts Credit Union Advantages

  • Average 0.25-0.5% lower rates
  • $1,000-$3,000 lower closing costs
  • More flexible approval criteria
  • Local decision-making
  • Member-focused (not profit-focused)
  • Community involvement

Bottom Line

For most Massachusetts homebuyers, credit unions offer better rates, lower fees, and more personalized service. However, always shop around and compare actual offers before making your decision. Check our current rates to see what Massachusetts credit unions are offering today.

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