The single biggest lever for getting a low mortgage interest rate is your credit score, but it’s far from the only one. Borrowers with scores of 780 or above are currently seeing 30-year conventional rates near 6.25%, while those at 620 pay closer to 7.14%, a gap that translates to tens of thousands of dollars over the life of the loan. The good news is that several factors are within your control, and working on them before you apply can meaningfully shrink what you pay.
Raise Your Credit Score Before You Apply
Your FICO score has a direct, tiered effect on the rate lenders offer you. Based on March 2026 data from Experian for a $350,000 conventional 30-year mortgage, here’s what the spread looks like:
- 780+: 6.25%
- 740: 6.44%
- 700: 6.63%
- 660: 6.88%
- 620: 7.14%
That 0.89 percentage point difference between 620 and 780 costs roughly $210 more per month on a $350,000 loan, or about $75,000 in extra interest over 30 years. Notice that above 780, the rate flattens out. You don’t need a perfect 850 to get the best pricing; reaching the high 700s gets you there.
If your score is in the mid-600s or low 700s, even a modest bump of 20 to 40 points can drop you into a cheaper tier. The fastest ways to move the needle before applying: pay down credit card balances to get your utilization below 30% (below 10% is better), avoid opening new accounts in the six months before your mortgage application, and dispute any errors on your credit reports. Pulling your own reports through AnnualCreditReport.com doesn’t affect your score.
Make a Larger Down Payment
Lenders price risk, and a bigger down payment signals less risk. According to the Consumer Financial Protection Bureau, a larger down payment generally earns you a lower interest rate because you have more equity in the property from day one. This is directly tied to your loan-to-value ratio (LTV), which is the percentage of the home’s value you’re borrowing. A 20% down payment means an 80% LTV; a 5% down payment means a 95% LTV.
Putting down 20% also eliminates the need for private mortgage insurance (PMI), which typically costs 0.5% to 1% of the loan amount per year. There’s an interesting wrinkle the CFPB points out: lenders sometimes offer a slightly lower interest rate to borrowers who put down just under 20% compared to those at 20%, because the mortgage insurance those borrowers pay reduces the lender’s risk. But that lower rate is deceptive. When you add the PMI premium on top, your total monthly cost is almost always higher than it would be with 20% down and no insurance.
If 20% isn’t realistic, don’t let that stop you from buying. But understand that every additional percent you can put down improves your rate and reduces your total borrowing cost.
Choose the Right Loan Type and Term
The type of mortgage you choose affects your rate as much as your credit score does. A 15-year conventional loan currently averages around 5.70% to 5.73%, compared to roughly 6.25% to 7.14% for a 30-year conventional loan (depending on credit score). That’s because the lender’s money is at risk for half the time. The tradeoff is a significantly higher monthly payment, since you’re compressing the same principal into 15 years.
Government-backed loans can also offer competitive pricing. FHA loans, backed by the Federal Housing Administration, averaged 6.37% for a 30-year term in late 2025. VA loans, available to eligible veterans and active-duty service members, averaged 6.46% over the same period. Conventional 30-year loans came in at 6.34%. The differences are small, and the best choice depends on your eligibility and financial profile. FHA loans allow credit scores as low as 580 with 3.5% down, which can be valuable if your credit isn’t strong enough for the best conventional pricing. VA loans require no down payment at all, which frees up cash even if the rate is slightly higher.
Adjustable-rate mortgages (ARMs) start with a lower fixed rate for an initial period, typically five or seven years, then adjust periodically based on market rates. A 5/6 ARM currently averages around 6.05% to 6.32%. If you’re confident you’ll sell or refinance within a few years, an ARM can save you money. If you plan to stay long-term, the risk of rate increases usually outweighs the initial savings.
Buy Discount Points
Discount points let you pay an upfront fee at closing to permanently reduce your interest rate. One point costs 1% of your loan amount. On a $300,000 mortgage, that’s $3,000 per point. In exchange, the lender lowers your rate, though the exact reduction varies by lender and market conditions. There’s no universal formula like “one point always equals 0.25% off.”
To figure out whether points make sense, calculate your break-even period. Divide the upfront cost of the points by the monthly savings they create. If one point costs $3,000 and saves you $50 per month, you’d need to stay in the home for 60 months (five years) before the upfront cost pays for itself. After that, every month is pure savings. If you expect to move or refinance within a few years, buying points is usually a losing bet.
Shop Multiple Lenders
This is the most underused strategy. Rates vary meaningfully from one lender to the next, even for the same borrower with the same financial profile. Banks, credit unions, online lenders, and mortgage brokers all price loans differently based on their overhead, their appetite for certain loan types, and how much volume they’re trying to generate.
Get loan estimates from at least three to five lenders. Federal law requires each lender to give you a standardized Loan Estimate form within three business days of receiving your application, which makes comparison straightforward. Focus on the interest rate, the annual percentage rate (APR, which includes fees and gives you the true cost of the loan), and the closing costs. A lender offering a lower rate but charging $4,000 more in origination fees might not actually be cheaper.
Don’t worry about multiple credit inquiries hurting your score. Credit scoring models treat all mortgage-related inquiries within a 14- to 45-day window as a single inquiry, specifically so you can shop without penalty. Use that window.
Lock Your Rate at the Right Time
Mortgage rates change daily, sometimes more than once a day. Once you find a rate you’re happy with, ask the lender to lock it. A rate lock guarantees your quoted rate for a set period, typically 30 to 60 days, while your loan is processed. Longer lock periods sometimes cost slightly more because the lender is taking on more risk that rates will move.
If you’re under contract on a home and rates are volatile, locking early protects you from increases. Some lenders offer a “float-down” option that lets you take advantage of a rate drop after you’ve locked, usually for an additional fee. Ask whether this is available and what it costs before you commit.
Reduce Your Debt-to-Income Ratio
Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward debt payments, including the future mortgage. Most lenders want to see a DTI below 43%, and borrowers with lower ratios often qualify for better rates. If your DTI is borderline, paying off a car loan or credit card before applying can improve both your rate and the loan amount you qualify for.
Even small changes help. Paying off a $300 monthly car payment doesn’t just lower your DTI. It also frees up room for a larger down payment if you redirect those funds into savings for a few months before buying.
Consider the Full Cost, Not Just the Rate
A low interest rate means nothing if the closing costs eat up your savings. Origination fees, appraisal fees, title insurance, and other charges can add up to 2% to 5% of the loan amount. When comparing lenders, use the APR rather than the advertised rate, since the APR folds in most of those fees and gives you a truer picture of your annual borrowing cost.
Some lenders offer “no-closing-cost” loans that roll fees into the loan balance or compensate by charging a slightly higher rate. These can make sense if you’re short on cash at closing, but they raise your long-term cost. Run the numbers both ways before deciding.