Getting the lowest possible mortgage rate comes down to a handful of factors you can actually control: your credit score, your down payment, the loan term you choose, the type of lender you work with, and how aggressively you shop. Borrowers with scores above 760 and at least 20% down routinely lock in rates well below the national average. Here’s how to put yourself in that position.
Push Your Credit Score Above 760
Your credit score is the single biggest lever you have over your mortgage rate. Lenders price loans in tiers, and borrowers with FICO scores of 780 or higher currently see rates roughly half a percentage point lower than those in the mid-600s. The sweet spot to aim for is 760 and above, which is where most lenders start offering their best pricing.
If you’re six months or more away from applying, focus on paying down revolving balances (credit cards, personal lines of credit) to get your utilization below 30%, and ideally below 10%. Don’t open new accounts or close old ones during this window. If you’re within a few weeks of applying, avoid any hard credit inquiries and keep balances exactly where they are. Even a 20-point improvement can bump you into a better pricing tier and save thousands over the life of the loan.
Pull your credit reports from all three bureaus before you apply. Errors happen more often than you’d expect, and disputing an incorrect late payment or a balance that should have been cleared can nudge your score up meaningfully.
Make the Largest Down Payment You Can
A larger down payment signals lower risk to the lender, and lower risk translates directly into a lower rate. The Consumer Financial Protection Bureau notes that putting 20% or more down will usually get you a better interest rate than a smaller down payment.
There’s a nuance here worth understanding. Some borrowers with down payments just under 20% actually see a slightly lower quoted rate than those at exactly 20%, because they’re paying private mortgage insurance (PMI), which reduces the lender’s exposure. But that lower rate is misleading. When you factor in the monthly PMI premium, the total cost of borrowing is higher. If you can reach 20%, you eliminate PMI entirely and reduce your overall expense, even if the rate itself doesn’t drop dramatically at that exact threshold.
If 20% isn’t realistic, aim for at least 10%. The jump from 3% down to 10% down often produces a noticeable rate improvement and significantly lowers your PMI cost. Every additional dollar you put down reduces the lender’s risk and works in your favor during rate negotiations.
Consider a 15-Year Loan
Shorter loan terms come with meaningfully lower rates. As of late April 2026, the average 30-year fixed rate sits around 6.38%, while the average 15-year fixed rate is about 5.57%. That’s a spread of roughly 0.8 percentage points, which adds up to a massive difference in total interest paid.
On a $350,000 loan, the difference between those two rates means you’d pay approximately $200,000 less in total interest with the 15-year term. The trade-off is a higher monthly payment, often 40% to 50% more than the 30-year option. But if your income comfortably supports it, a 15-year mortgage is one of the most straightforward ways to lock in a lower rate and build equity faster.
If the 15-year payment feels too tight, some lenders also offer 20-year terms with rates that fall between the two. It’s worth asking about.
Shop Multiple Lender Types
Where you apply matters almost as much as what you bring to the table. Credit unions generally offer more competitive mortgage rates than traditional banks. NCUA data from mid-2025 showed credit unions averaging 6.74% on a 30-year fixed mortgage compared to 6.84% at banks. That 0.10% gap might sound small, but on a $350,000 loan over 30 years, it saves you roughly $8,000 in interest.
Online lenders and mortgage brokers add more competition to the mix. Online lenders often have lower overhead and pass some of that savings along in their rates. Mortgage brokers shop across dozens of wholesale lenders on your behalf, which can surface deals you wouldn’t find on your own.
The key is to collect quotes from at least three to four lenders across different categories: a credit union, your current bank, an online lender, and possibly a broker. When you apply for multiple mortgages within a 14- to 45-day window (depending on the scoring model), all the inquiries count as a single hard pull on your credit, so there’s no penalty for shopping aggressively.
Buy Discount Points at Closing
Discount points let you pay upfront to permanently reduce your interest rate. One point costs 1% of the loan amount and typically cuts the rate by up to 0.25%. On a $350,000 mortgage, one point costs $3,500 and might lower your rate from, say, 6.38% to 6.13%.
Whether points make sense depends on how long you plan to stay in the home. That $3,500 investment saves you roughly $50 to $60 per month on a 30-year loan at that amount, so you’d break even in about five to six years. If you expect to stay longer than that, points pay off. If you might sell or refinance sooner, skip them and keep the cash.
You can often buy fractional points as well. Half a point on a $350,000 loan would cost $1,750 and drop your rate by roughly 0.125%, giving you a quicker break-even timeline if you’re not sure about your long-term plans.
Use Relationship Discounts
Several large banks offer rate reductions or fee waivers to customers who already hold accounts with them. These relationship discounts are often unpublicized and require you to ask.
- Rate discounts for large depositors: Some banks knock 0.125% to 0.25% off your mortgage rate if you hold $500,000 or more in deposit or investment accounts with them. At $1 million or more, the discount can reach 0.25%.
- Closing cost reductions: Even with a modest checking account balance, certain lenders will credit a portion of your closing costs. One major bank offers up to 0.25% of the loan amount (capped at $1,000) just for having a checking account with at least $25 deposited.
- Origination fee waivers: Other banks discount origination fees on a tiered basis, ranging from $200 to $600 depending on your average daily balance with the institution.
These perks won’t always beat a naturally lower rate from a competing lender, so treat them as one data point in your comparison. But if you already bank somewhere that offers a relationship discount, it’s free money you shouldn’t leave on the table.
Lock Your Rate at the Right Time
Once you find a rate you’re comfortable with, lock it in. A rate lock guarantees your quoted rate for a set period, typically 30 to 60 days, while your loan is processed. Most lenders offer 30-day locks at no extra cost, with longer locks (45, 60, or 90 days) sometimes carrying a small fee or a slightly higher rate.
Timing a rate lock perfectly is impossible, since mortgage rates move daily based on bond markets, inflation data, and Federal Reserve policy. The practical approach is to lock as soon as you have a rate that fits your budget and makes the deal work financially. Waiting for rates to drop another eighth of a point can backfire if they move the other direction.
If rates do fall significantly after you lock, ask your lender about a “float down” option. Some lenders allow a one-time adjustment to a lower rate if market rates drop before closing, though this feature isn’t universal and may come with conditions.
Lower Your Debt-to-Income Ratio
Lenders evaluate your debt-to-income ratio (DTI), which is your total monthly debt payments divided by your gross monthly income. Most conventional lenders want to see a DTI below 43%, and borrowers with DTIs under 36% often qualify for better rate pricing.
To lower your DTI before applying, pay off or pay down car loans, student loans, or credit card balances. If you carry a small balance on an installment loan with only a few payments left, eliminating it entirely removes that payment from the calculation. Increasing your income also helps, whether through a raise, a side job, or including a co-borrower’s income on the application. Every percentage point you shave off your DTI strengthens your application and gives you more leverage to negotiate.
Get Preapproved Before You Shop
A preapproval letter from a lender shows sellers you’re serious, but it also forces you to confront your rate early in the process. Getting preapproved by multiple lenders gives you competing offers you can use as negotiating leverage. If one lender quotes you 6.25% and another comes in at 6.10%, bring the lower offer back to the first lender and ask them to match it. Many will, especially if you’re a strong borrower.
Preapprovals typically involve a hard credit pull and a review of your income, assets, and debts. They’re valid for 60 to 90 days, so time them to align with when you plan to make offers on homes. Starting this process early also gives you a clear picture of what rate range is realistic for your financial profile, so you can focus your energy on the strategies that will move the needle most.