PennyMac Mortgage Review: Low Fees & Competitive Rates

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PennyMac is the second-largest lender in the U.S., with more than 2 million originations under its belt.

This digital-based lender offers a variety of loan types and terms and excels in convenience for those who prefer online or phone-based service.

But if you’re looking for an in-person lender, PennyMac isn’t for you, as they have no brick-and-mortar locations to serve borrowers.

And though PennyMac is licensed to service loans in all 50 states, it’s not licensed to lend in all 50 states – at the time of writing, New York customers will have to find another lender for their mortgage needs.

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PennyMac Mortgage Pros and Cons


  • Excellent online and phone-based loan servicing
  • Frequent discounts and fee waiver
  • Lenient qualification requirements
  • Guarantees on-time closing or you’ll receive a $500 Visa gift card


  • No brick-and-mortar locations
  • Origination fees trend higher than the national median
  • Limited low-down payment options
  • No second, jumbo, or USDA mortgages listed at the time of writing

PennyMac Mortgage Overview

Founded in 2008, PennyMac is a publicly traded, nationally available direct mortgage lender that boasts a decent-sized loan menu, including purchase, government-backed, and refinance loans.

And unlike many of its peers, PennyMac services the mortgages it originates rather than selling them to third parties, saving borrowers potential headaches down the road.

While the lender does have a few sales offices, you can only apply online or over the phone. Most eligible borrowers will be preapproved in minutes.

You can also peruse the many tools PennyMac offers on its website, such as calculators, the mortgage learning center, and real estate concierge services.

Once you’re approved, you’ll work with one point of contact and the PennyMac Mortgage Access Center (m.a.c.) online portal to complete the underwriting and closing processes.

Closing takes an average of 45-60 days, though borrowers who primarily work through the m.a.c. portal may see this time reduced.

What Types of Mortgages Does PennyMac Offer?

PennyMac offers conventional, FHA, and VA loans with a variety of terms. For instance, you can choose from flex-term fixed-rate mortgages, traditional 15- or 30-year fixed-rate mortgages, and four adjustable-rate loan terms.

PennyMac originates mortgages for single-family homes, condos, townhomes, and some multi-unit properties, depending on the loan program. The lender also services loans for investment properties.

All that said, PennyMac’s menu is missing a few products.

To start, PennyMac notes that it “temporarily paused” jumbo lending in April 2020 due to the pandemic, and there’s no sign of when these loans will return.

And while they’re said to offer USDA loans, no USDA mortgage information could be found on their website at the time of writing. (PennyMac does offer USDA streamline refinancing.)

PennyMac Mortgage Qualification Requirements

PennyMac’s conventional mortgages adhere to the conforming loan requirements set by Fannie Mae and Freddie, while government-backed loans follow the guidelines set by the FHA and VA, respectively. While your situation may vary, typical requirements include:

  • 3-5% down and a credit score of 620 for conventional loans
  • 5% down and a credit score of 640 for FHA loans
  • 0% down and a credit score of 640 for VA loans
  • 15-20% down and “good or excellent credit” on investment properties and flex-term loans

Additionally, most borrowers must have a debt-to-income (DTI) ratio of 43% to 50%, though the lender may accept higher ratios for some borrowers.

And those looking for second homes or furnishing self-employment income may use alternative tax histories and profit-and-loss statements instead of a traditional W-2.

PennyMac Mortgage Rates and Fees

You can check sample rates at PennyMac daily on conventional, FHA, and VA loans and refinances.

When we checked on 27 October, sample rates ran from 2.125% to 2.875% depending on the loan term with a 720 FICO score and one discount point. However, your rates may vary based on your financial, credit, and location information.

When it comes to fees, PennyMac usually charges a flat $1,100 mortgage origination fee on all loans.

But through the end of 2021, the lender will waive the fee on all new mortgages. And if you get preapproved with PennyMac prior to locking in your purchase loan, you’ll also receive 0.50% of your loan amount applied as a discount come closing.

Refinancing Mortgages with PennyMac

PennyMac allows you to refinance conventional and government loans with rate-and-term, cash-out, and streamline refinancing. Qualifying borrowers can also select USDA streamlined refinancing as an option.

PennyMac Mortgage Loan Features and Benefits

Get Instant Rate Quotes

You can get an instant rate quote online tailored to your situation by filling out a quick form.

And if you want to figure out how discount points may impact your finances for the life of your loan, PennyMac provides a calculator for that, too.

PennyMac is also transparent about possible interest rates on its website, with sample rates updated daily for conventional, FHA loans, and VA mortgages.

But bear in mind that your actual rates can change based on your location, down payment, credit score, loan term, and other factors.

Online Convenience

Applying and getting preapproved with PennyMac takes just minutes online. Then, you can use PennyMac’s online tools to upload documents, track your loan status, and sign “papers” come closing. Plus, you can peruse the plethora of educational resources and calculators anytime.

Strong Customer Service

PennyMac offers flexible customer service hours, with its sales centers open from 6am-7pm PST on weekdays and 6am-5pm PST on Saturdays.

And once your application goes through, PennyMac will put you in contact with only one loan officer and one My m.a.c. Team member to keep communication consistent.

Waived Lender Fees

PennyMac charges a flat-rate $1,100 mortgage origination fee. However, through the end of 2021, borrowers can take advantage of a promotion to reduce or waive the fee entirely.

Additionally, customers who get preapproved with PennyMac prior to locking their purchase loans will get 0.50% of the loan’s principal applied as a discount at closing.

PennyMac Mortgage Loan Drawbacks

Higher Minimum Credit Score Requirements

Many government loans require a minimum 500 to 580 credit score for borrowers. However, PennyMac requires a minimum 640 credit score for its government-backed mortgages.

No Second Mortgages

According to a press release, PennyMac began to roll out home equity lines of credit (HELOCs) in 2019.

However, no information was available on their site at the time of writing. The lender also doesn’t appear to offer home equity loans.

No Physical Locations (for Customers)

PennyMac runs eight sales offices around the country, but the lender isn’t designed for in-person customer service.

Instead, prospective borrowers have to apply and conduct the mortgage underwriting process online or over the phone.

Few Proprietary Loans

Some of PennyMac’s competitors offer their own loan products, and as one of the nation’s largest lenders, you might expect PennyMac would, too.

But this lender mostly sticks with the standard loan palette – and some “regular” products, such as second mortgages, jumbo loans, and USDA mortgages, appear to be off the table.

How Does PennyMac Compare to Other Mortgage Lenders?

#1. PennyMac Mortgage vs. Rocket Mortgage

Rocket Mortgage is Quicken Loans’ online lending platform. Rocket borrowers can enjoy the convenience of online self-service, near-instant approval, and 90-day rate locks.

However, Rocket Mortgage is limited in its loan selection, and if you want a customized interest rate quote, you’ll have to consent to a hard credit check.

>> More: Rocket Mortgage Review

#2. Quicken Loans vs. PennyMac Home Loans

Quicken Loans also doesn’t operate in-person branches, favoring the online approach in all 50 states.

Borrowers can enjoy the convenience of digital and phone-based lending, e-closing, and a full range of educational materials.

That said, Quicken’s interest rates typically trend higher than the national median.

>> More: Quicken Loans Mortgage Review

#3. Better Mortgage vs. PennyMac Mortgage is an online-only lender that boasts 24/7 digital and phone service, up to $3,000 in savings, and an expedited closing period.

Better services a range of conventional, jumbo, and refinance loans for borrowers across the credit and debt spectrums.

Most borrowers can get preapproved in under an hour and enjoy on-demand rate locks.

>> More: Better Mortgage Review

#4. Penny Mac Mortgage vs. Guild Mortgage

Guild Mortgage services mortgages in 48 states, with brick-and-mortar branches in 31 states.

The lender claims it can close on your loan in just two weeks as it processes, underwrites, and funds much of its menu in-house.

Guild Mortgage also offers plenty of online tools, including asset retrieval and e-closing, as well as more than 500 down payment aid programs.

>> More: Guild Mortgage Review

PennyMac Mortgage FAQs

Is PennyMac a Good Choice for Mortgages?

If you want online convenience or investment financing, PennyMac offers plenty of tools to meet your needs. But if you have a low credit score, this lender may not be right for you.

How Do PennyMac Mortgage Rates Compare to the National Average?

PennyMac’s interest rates typically trend lower than the national average. However, the lender’s lowest advertised rates do usually include one mortgage discount point.

Does PennyMac Offer Mortgage Refinance?

Yes, PennyMac offers refinance loans for conventional and government-backed mortgages.

What Credit Score Do You Need for a PennyMac Mortgage?

Conventional mortgages from PennyMac require a minimum 620 credit score to qualify, while VA loans require at least a 640.

Does PennyMac Charge a Mortgage Origination Fee?

Typically, PennyMac charges a flat-rate $1,100 mortgage origination fee. But the lender also periodically runs promotions to reduce or waive the fee entirely.

Bottom Line: PennyMac Mortgage Review

PennyMac may be a suitable online mortgage lender if you’re looking for a streamlined mortgage process and want to save money on lender fees.

They also offer flexible terms, same-day preapproval, and plenty of online tools to walk you through the underwriting states.

However, their closing periods run up to 60 days, and if you don’t catch the lender when they offer a discount, you may pay higher-than-average closing fees.

Jordan Blansit
Jordan Blansit

Jordan Blansit is a Senior Writer, Researcher, & Product Analyst for SimpleMoneyLyfe with an inexplicable predilection for mortgages, investing, and personal finance. When she’s not click-clacketing from the comfort of her living room, you can find her in the California Redwoods or Oregon Siskiyous. Jordan’s areas of expertise are mortgages, personal loans, credit cards, and investing.