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Thanks to a 6.9 percent increase in average home values nationwide, the so-called conforming loan limit on mortgages backed by Fannie Mae and Freddie Mac will rise next year by the same percent, to $484,350 in most of the country and to $726,525 in high-cost areas including seven Bay Area counties.

Loans that exceed the Fannie-Freddie limits are called jumbos. Historically, they cost a bit more than conforming loans, but today the opposite is true, at least for the best-qualified borrowers.

Wells Fargo, for example, on Tuesday was charging an annual percentage rate of 4.99 percent on conforming loans and only 4.54 percent on jumbo loans (both assuming a 25 percent down payment).

Nationwide, the average rate is 5.01 percent on conforming and 4.9 percent on jumbo mortgages, both with a 20 percent down payment, according to Bankrate.com.  Read more