Securing a good mortgage rate in 2026 may seem confusing. Rates fluctuate frequently, all lenders price their loans differently and the advice that worked to get a good deal last year may not be relevant today.
The good news is this: you are not stuck with whatever rate you’re offered.
Those who find the best mortgage rates generally start down a smart financial path before beginning the application process. They get their finances in order, learn how lenders are evaluating them and compare their options carefully. These tactics apply whether you’re buying your first home or refinancing an existing loan.
Below are 8 proven strategies that can help you secure a lower mortgage rate and save thousands of dollars over time.
Why Your Mortgage Rate Is So Important
Even a small difference in interest rates can cost you a lot of money.
For example, on a $300,000 mortgage:
- A 7% rate costs about $60 more per month than a 6.5% rate
- That’s $720 per year
- Over 30 years, that adds up to about $21,000 extra
This is why taking time to get the lowest possible rate really matters.
Strategy 1: Improve Your Credit Score Before Applying
Your credit score is one of the first things lenders check. It shows how well you’ve handled credit in the past and helps lenders decide how risky you are.
Mortgage rates are based on credit score ranges, not just exact numbers. Even a small increase can move you into a better range with lower rates.
For example:
- A score around 620 may get a much higher rate
- Raising it to 640 or higher can lower your interest rate noticeably
How to improve your credit score
Start by checking your credit report from all three credit bureaus. Errors are common, and fixing them can raise your score quickly.
Pay down credit card balances, especially cards that are close to their limits. Try to use less than 30% of your available credit.
Always pay bills on time. One missed payment can hurt your score for months. Avoid opening new credit accounts or making large purchases before applying for a mortgage.
Strategy 2: Lower Your Debt-to-Income Ratio (DTI)
Lenders want to know if you can comfortably afford your mortgage payment. This is where your debt-to-income ratio matters.
Your DTI is the percentage of your income that goes toward monthly debt payments.
For example:
- Monthly debt payments: $1,100
- Monthly income: $5,000
- DTI = 22%
While some lenders allow high DTIs, the best mortgage rates usually go to borrowers with DTIs under 25%.
How to reduce your DTI
Pay off smaller debts if possible. Eliminating a car loan or credit card payment can make a big difference.
If you earn extra income from side work or bonuses, tell your lender. Higher income lowers your DTI and improves your chances of getting a better rate.
Strategy 3: Save for a Larger Down Payment
Many loans allow low down payments, but larger down payments usually mean lower interest rates.
When you put down less than 20%, lenders see more risk. To protect themselves, they often charge higher rates and require private mortgage insurance (PMI).
Putting down 15% to 20% can:
- Lower your interest rate
- Remove PMI
- Reduce your monthly payment
Tips to grow your down payment
Open a separate savings account just for your home purchase. Automate deposits so saving becomes easier.
Check for local or state down payment assistance programs. Many first-time buyers qualify without realizing it.
Some loan programs allow gifted money from family. Just make sure the gift is properly documented.
Strategy 4: Buy Discount Points Carefully
Discount points allow you to pay extra upfront to lower your interest rate. One point normally equals 1% of your loan amount, and it reduces your rate by about 0.25%.
This can be a good system, but only if you plan to remain in the home long enough to recover the cost.
When discount points make sense
You plan to keep your home for 7–10 years or longer: If you think you’re staying in the house long enough, buying points can save money over time.
If you plan to move or refinance soon, points may not be worth it.
Always ask your lender to show you the break-even point before buying points.
Mortgage Discount Points: What They Are, How They Work
Strategy 5: Use a Seller or Builder Rate Buydown
In some cases, the seller or builder may offer to pay for a temporary rate buydown.
A common option is a 2-1 buydown:
- Year 1: rate is 2% lower
- Year 2: rate is 1% lower
- After that: full rate applies
This lowers your payments in the first years and can make buying more affordable upfront.
What to watch out for
Make sure the home price is not increased to cover the buydown. Compare similar homes to confirm you’re getting fair value.
Also, be sure you can afford the full payment once the buydown period ends.
Strategy 6: Consider an Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages are not right for everyone, but they can be useful in certain situations.
Most modern ARMs offer:
- A fixed rate for 3, 5, 7, or 10 years
- Lower starting rates than 30-year fixed loans
Who should consider an ARM
If you plan to sell or move before the fixed period ends, an ARM can save you money.
Just be sure to understand:
- How often the rate adjusts
- How much it can increase
- The lifetime rate cap
Strategy 7: Choose a Shorter Loan Term
Shorter loans like 15-year or 20-year mortgages usually have lower interest rates than 30-year loans.
While monthly payments are higher, you:
- Pay off the home faster
- Build equity quicker
- Pay far less total interest
This option works best if your income is stable and your budget can handle the higher payment.
Strategy 8: Look for an Assumable Mortgage
Some government-backed loans—FHA, VA, and USDA loans—are assumable. This means you can take over the seller’s existing mortgage and interest rate.
If the seller has a rate from a few years ago, this could save you a lot of money.
Things to know
You must qualify for the loan with the lender. You’ll also need to cover the difference between the loan balance and the home’s current value.
These deals are rare, but they can be worth the effort if you find one.
Should You Refinance Later ?
Many buyers plan to refinance when rates drop. This can work, but it’s not guaranteed.
Refinancing usually makes sense when you can lower your rate by at least 1%. Remember, refinancing comes with closing costs, so always run the numbers first.
Frequently Asked Questions
What was the lowest mortgage rate ever?
The lowest recorded 30-year fixed rate was about 2.65% in 2021, during the COVID-19 pandemic.
Will rates return to 3% or 4%?
Most experts say this is unlikely without another major economic crisis. Rates in the 5%–6% range are considered normal historically.
Which mortgage usually has the lowest rates?
VA loans often offer the lowest rates, especially for eligible veterans and service members.
How fast can I improve my credit score?
Fixing errors or paying down credit cards can help within 1–3 months. Bigger improvements usually take 6–12 months.
Your Action Plan
Start by checking your credit and fixing any issues. Work on lowering debt and saving for a larger down payment.
Once you’re ready, get quotes from at least three lenders. Focus on the APR, not just the interest rate.
If the undertaking feels daunting, a mortgage broker can guide you through the process of comparing offers.
A mortgage is a monumental financial commitment — one of the largest you’ll ever make. Surprisingly, a little bit of extra preparation now could potentially save you tens of thousands of dollars over the life of the loan.
Disclaimer: This post is for informational purposes only and it is not intended to be professional financial advice. Mortgage rates, programs, and requirements change frequently. For advice on financial issues, always consult a qualified financial professional.
