How to Get the Best Mortgage Rate

Half a percent on a 30-year mortgage is worth tens of thousands of dollars — on a $400,000 loan, dropping from 6.5% to 6.0% saves about $130 a month and roughly $47,000 over the life of the loan. Your rate is not handed to you; it is earned, and small moves stack up. Here are eight proven tactics to squeeze the lowest rate out of the market.

1. Raise your credit score

Your credit score is the single biggest factor in your rate. Lenders price risk, and the best rates go to borrowers at 760 and above. The difference between a 760 score and a 660 score can be half a point or more on the same loan — which is worth tens of thousands over 30 years.

Fix this before you apply. Pay down credit-card balances to lower your utilization, dispute errors on your report, and never miss a payment in the months leading up to the application. A jump of 40 or 50 points can meaningfully change the rate you are offered. See how to build credit to buy a home for the full playbook.

2. Put more down

A larger down payment makes you a lower-risk borrower, and lenders reward that two ways: a slightly better rate and no PMI once you cross 20%. On a $400,000 home, 20% down beats 5% down on both fronts.

Even if you cannot reach 20%, every step up helps. Going from 3% to 10% down lowers the loan balance and can drop the PMI rate, which cuts your total monthly cost even if the interest rate itself barely moves.

3. Shop multiple lenders

This is the highest-return, lowest-effort move on the list, and most people skip it. Rates for the same borrower on the same day vary by 0.5% or more between lenders. One lender might quote 6.75% while another quotes 6.25%.

Get quotes from at least three to five lenders — a big bank, a credit union, a mortgage broker, and an online lender. Do it within a two-week window so the credit inquiries count as a single hit on your score. Then make the lenders compete. A quarter-point difference is thousands of dollars, so the hour of shopping is some of the best-paid work you will do.

4. Compare loan types

Conventional, FHA, VA and USDA loans all price differently. For a strong borrower, conventional usually wins. For a veteran, VA loans routinely offer lower rates with no down payment. For a first-time buyer with thin credit, FHA may be the only door open — but its mortgage insurance changes the math.

Do not assume your bank's default product is your best option. Run the full monthly cost — rate plus mortgage insurance plus fees — for each loan type, not just the headline rate.

5. Buy points to lower the rate

Mortgage points are prepaid interest: you pay an upfront fee at closing, usually 1% of the loan, to permanently reduce the rate by about 0.25%. It is a trade — cash now for savings every month after.

Points only pay off if you stay past the break-even point. If one point ($4,000 on a $400,000 loan) saves you $65 a month, you break even in about 62 months, or five years. Stay longer and you win; move sooner and you lose. See are mortgage points worth it for the full math.

6. Shorten the term

15-year loans carry rates about 0.25% to 0.75% lower than 30-year loans, because the lender's money is at risk for half as long. The catch is a much higher monthly payment — roughly 35% to 40% more — so only go shorter if the payment fits your budget.

7. Lower your DTI

Your debt-to-income ratio affects more than approval — it affects pricing. A borrower with a low DTI is less likely to default, so lenders offer them a better rate. Pay down credit cards and car loans before you apply, and you both improve your odds and earn a cheaper rate.

8. Lock at the right time

Mortgage rates move daily with the bond market. Once you find a rate you are happy with, lock it — a rate lock freezes the rate for a set period, usually 30 to 60 days, while your loan closes. If rates dip after you lock, ask about a "float-down" option that lets you capture a lower rate if it falls by enough.

Do not try to time the market perfectly. Lock when the number fits your budget, and stop watching the daily ticker.

How the tactics stack up

None of these moves works alone, but they compound. A borrower who raises their score from 680 to 760, puts 20% down, shops five lenders, and takes a 15-year term might land a rate a full point lower than a borrower who does none of it. On a $400,000 loan, a full point is worth about $260 a month and over $90,000 in interest. That is the real price of not optimizing.

Frequently asked questions

What credit score gets the best mortgage rate?

740 to 760 and above typically unlocks the best rates. Below 700, pricing worsens noticeably, and below 620 conventional loans become hard to get.

How many lenders should I get quotes from?

At least three, ideally five, within a two-week window so the credit checks count as one inquiry. Make the quotes compete.

Can I negotiate a mortgage rate?

Yes. Lenders can often match or beat a competitor's written quote. The best negotiation tool is a competing loan estimate in hand.

Is it worth paying points for a lower rate?

Only if you stay past the break-even point — divide the points' cost by the monthly savings. Long-term owners win; short-term owners lose.

Whatever rate you land on, see what it actually costs each month on the HomeMath mortgage calculator before you sign.