Mortgage rates have recently dropped with hopes of a Federal Reserve rate cut, but they have stayed about the same since then. Experts say rates probably won’t go down much more until at least the end of 2025.

So, how can you get the lowest rate for your home loan now? Here are eight useful tips:
 

1. Improve Your Credit Score

Mortgage rates depend a lot on your credit score. The higher your score, the better the rate you can get. For example, someone with a score of 620 might pay an interest rate of 7.59%.

If you raise your score to between 640 and 659, your rate could drop to 7.43%. The savings increase as your credit score goes up.
 

2. Lower Your Debt-to-Income Ratio (DTI)

Lenders look at how much money you owe each month compared to what you earn (DTI). Less debt means better rates. Aim for a DTI of 25% or less to get the best rate, though most lenders allow up to 35%.

You can calculate DTI by dividing your monthly debt by your gross (before-tax) monthly income.
 

3. Make a Larger Down Payment

The more money you put down at the start, the lower your mortgage rate may be. While some loans allow as little as 3% down, the median for first-time home buyers in 2024 was 9%. A bigger down payment shows lenders you’re a lower risk.
 

4. Buy Discount Points

You can prepay some interest to get a lower ongoing mortgage rate—this is called buying discount points. Generally, one point costs 1% of your total loan, and it can lower your interest rate by about a quarter of a percentage point.

Calculate if the upfront cost makes sense compared to how long you plan to stay in your home.

Tip: When comparing loan offers, look at rates with zero points first, then decide if buying points is worth it for you.
 

5. Get an Interest Rate Buydown

Sometimes, home builders, sellers, or lenders offer a temporary interest rate buydown to attract buyers. This can lower your monthly payments for the first few years but may lead to higher payments later.

Always compare the total cost with and without the buydown.
 

6. Consider an Adjustable-Rate Mortgage (ARM)

ARMs start with a fixed rate for several years and then adjust up or down. These sometimes have a lower starting rate than standard fixed-rate loans, especially if you only plan to stay in your home for a few years.

But remember, your payment could go up after the fixed period ends.
 

7. Get a Shorter-Term Loan

Loans with shorter terms (like 15 or 20 years instead of the standard 30) usually come with lower interest rates. However, your monthly payments will be higher because you’re paying off your home faster.
 

8. Find an Assumable Mortgage

An assumable mortgage lets you take over another person’s existing low-rate home loan. Most conventional loans aren’t eligible, but some government-backed loans, like FHA, VA, or USDA loans, are.

You’ll need extra cash to pay the home seller for their equity.
 

Can You Get a Lower Mortgage Rate?

Mortgage rates often change and depend on things like your credit score, debt, and down payment. To get the lowest rate, check your finances and shop around with several lenders.

Many homeowners today already have rates lower than 5%, making refinancing less attractive right now. But because homeownership is a long-term investment, keep an eye on rates.

In the future, if rates drop 1–2% below what you have, refinancing may make sense.

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