How to Get a Really Low Mortgage Rate (Even If You Think Rates Are High)
You’ve probably heard people say, “Rates are too high, I’ll wait to buy a house.” That’s nonsense. The truth is, there are always plenty of ways to get a lower interest rate. You just have to know where to look and not believe the headlines.
I’ve been a mortgage expert for more than half my life. First as a mortgage broker, then as a real estate investor. I’m also a Chartered Financial Analyst (CFA), and believe me, there are plenty of levers people overlook because no one’s getting paid to show them to you.
Agents know about some of these, but it’s a hassle for them. So they don’t tell it to you.
So in this article, I’ll break down the smartest ways to land a lower mortgage rate, even in this market. I’ll share real tactics, overlooked mortgage options, and strategies the so-called “experts” never talk about.
My money is where my mouth is. I’ve done (most) of these.
Ready to see how it’s done? Keep reading, you’re not leaving money on the table today.
Table of Contents
Start by Negotiating Directly with Your Lender
Let me save you some trouble. The first thing you should do is stop treating a mortgage offer like it’s carved in stone. It’s not. When I was a mortgage broker, I lowered people’s rates just because they asked. Often by 25-50 basis points.
It can be even more with manager approval.
Lenders have wiggle room, they just don’t tell you that. If your credit score is solid and you’re willing to walk away, you’re in control.
You don’t get what you deserve, you get what you negotiate.
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Shop Around and Get Multiple Loan Offers
If you’re not getting at least three to five offers, you’re making it too easy for lenders. Every lender evaluates risk differently, some will see you as golden, others might not.
When you pit one offer against another, they’re more likely to sweeten the deal. I’ve personally saved thousands just because I had the nerve to play lenders off each other.
Don’t let loyalty or convenience cost you money. Shopping around isn’t optional, it’s essential.
Oh, and did this hurt my credit score? No. That’s a myth.
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Use Discount Points to Buy Down Your Rate
Want a lower rate? Pay for it upfront. It’s not magic, it’s math. Discount points typically lower your rate about 0.25% per point, and if you’re planning to stay put long-term, it’s money well spent.
This is by far my favorite. I pay discount points instead of a down payment. I also try to have sellers contribute discount points. The result. I had a mortgage that was 2.3% in 2016. Rates were in the 5s then.
This was well before everyone got lucky with rates in the 2-3% range. If you’re worried about PMI, don’t be. The PMI goes away very quickly, but you’re still locked into the super low rate.
Just make sure you calculate how long it’ll take to break even. This isn’t for people jumping ship in two years. But if you’re planting roots, one or two points can shave serious cash off your total payments. It’s about thinking long game.
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Rate Buydowns: Pay Now or Later
Don’t confuse discount points with a temporary rate buydown. These buydowns, sometimes called 2-1 buydowns, give you lower payments for the first couple of years.
Builders and sellers love offering them in slow markets, and they’re great if you expect to earn more soon or refinance later. But don’t get fooled, those lower payments eventually reset. It’s not free money, it’s strategic timing.
I don’t like this one. I prefer long term. But for the sake of this article, this is a strategy to lower your interest rate.
Used wisely, it gives you breathing room without locking into sky-high rates upfront. Just make sure you know when the clock runs out.
Consider Assumable Mortgages: The Hidden Gem
This one’s gold, and no one talks about it because lenders and brokers don’t make money promoting it. Around 20% of mortgages, mainly FHA, VA, USDA loans, are assumable.
That means you can literally take over someone else’s loan and rate, often still sitting in the 2-3% range. Yes, you’ll need to cover their equity, but you sidestep today’s higher rates.
It’s not always easy, but worth asking every seller if their mortgage is assumable. Most buyers don’t even know it exists, which gives you a serious edge.
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Seller Financing: Cut Out the Banks
Sick of dealing with banks altogether? Good. Seller financing is when the seller plays the role of the bank and gives you the loan directly, no middlemen, no underwriting circus. You can negotiate better rates, flexible terms, maybe even avoid certain fees.
It works especially well if the seller owns the home outright and wants steady income without dealing with Wall Street. I’ve seen savvy buyers lock in lower rates this way, particularly in slower markets where sellers are more motivated.
It’s not traditional, but traditional won’t get you ahead.
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Shorten the Term: 15-Year Mortgages Save You Big
Here’s a simple one people overlook. 15-year mortgages almost always come with lower interest rates, typically about 0.5% to 0.75% less than 30-year loans.
Sure, your monthly payments are higher, but you build equity faster and pay way less interest overall. If you’ve got the income to handle it, this is a no-brainer. I’m not big on dragging debt out longer than necessary.
Want to own your home free and clear and save tens of thousands? Take the shorter route.
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Adjustable-Rate Mortgages (ARMs): Only If You’re Not Staying Long
Let’s get one thing clear. ARMs aren’t evil, they’re misunderstood. An adjustable-rate mortgage starts lower than a fixed-rate loan, sometimes by a full percentage point or more. But it only makes sense if you’re not sticking around forever.
You get a lower rate upfront, then the rate adjusts after the fixed period (typically 5-7 years). So, if you’re planning to sell, move, or refinance before that clock runs out, you pocket the savings without worrying about rising payments.
Just don’t use an ARM hoping rates magically drop, you need a clear exit strategy.
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Loyalty Discounts: Use Existing Bank Relationships
Banks love keeping you in their ecosystem, and if you’ve already got accounts with them, they might reward you for it. Some lenders offer loyalty discounts on mortgages when you’ve got checking, savings, or investment accounts under the same roof.
These aren’t massive cuts, but shaving off 0.125% to 0.25% still means money in your pocket. You just have to ask, don’t assume they’ll mention it. Make your existing relationship work harder.
They’re earning money off you already, might as well squeeze some of it back.
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Add a Co-Borrower with Better Credit
If your credit score isn’t perfect, adding a co-borrower with stronger credit can instantly change how lenders view your risk. Lenders average the credit profiles, and a higher score reduces perceived risk.
Lower risk equals a better rate. It’s simple math. This works especially well if you’ve got a spouse, family member, or partner willing to sign on who has a good credit history. Don’t overlook the power of bringing in reinforcements.
Oh, and it works the other way too. Is your spouse’s credit poor? Leave them off the mortgage. They can still be on the deed.
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Interest Rate Float Down Option
Locking in your mortgage rate feels final, but it doesn’t always have to be. Some lenders offer a float down option, meaning if rates drop after you lock but before closing, you can snag the lower rate for a fee.
It’s a hedge against locking too soon and missing out if the market shifts. You’ll pay a few hundred bucks typically, but in a volatile market, that safety net can be worth every penny.
Oh and this is also negotiable. Even after the lock period. I’ve had rate locks expire, but I asked for the new lower rate. I’ve also had rates expire and I asked to have the previous rate instead of the market rate. Each time the lender said ok.
It’s one of those things most people never even think to ask about. Don’t leave it on the table.
Look for Special Programs: Teachers, Veterans, First-Time Buyers
Believe it or not, there are programs out there designed to help specific groups lock in better mortgage terms. Teachers, nurses, police officers, veterans, and first-time homebuyers often qualify for reduced rates or grants through state or federal programs.
Some lenders partner directly with these programs to offer better deals. These aren’t gimmicks, they’re designed to lower the barrier for qualified buyers. Check what’s available in your area.
It’s free money if you fit the criteria, and you’d be surprised how many people miss out because they don’t ask.
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Energy-Efficient Mortgages (EEMs)
If your home is energy-efficient or you’re adding upgrades, lenders might reward you. Energy-Efficient Mortgages (EEMs) can offer better rates or higher loan limits because they factor in the savings on utilities.
You cut monthly costs and might even get favorable loan terms at the same time. Solar panels, better insulation, energy-star appliances, it all helps. It’s not just good for the planet, it’s good for your wallet.
Fewer expenses mean lenders see less risk, and they price your loan accordingly.
Portfolio Loans: Small Banks Playing Their Own Game
Some banks like to keep certain loans on their books instead of selling them off on the secondary market. These are called portfolio loans, and they come with more flexibility.
Because the bank holds the loan themselves, they might offer better rates to strong borrowers or for properties they want to invest in. Less red tape, more negotiation room.
If you’ve got solid credit and income, smaller regional banks can be a hidden goldmine for custom deals. Big banks won’t tell you that.
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Check Out Community Development Financial Institutions (CDFIs)
If you’re buying in certain communities, you might qualify for lower rates through Community Development Financial Institutions (CDFIs). These organizations are mission-driven and focus on underserved areas, often offering better loan terms to encourage investment.
Rates and terms are designed to make homeownership more accessible. It’s not a flashy strategy, but it’s powerful, especially if you’re targeting neighborhoods where traditional lenders tighten up.
Fewer people know about these programs, which makes them one more lever to pull.
Use Employer Mortgage Assistance Programs
Some companies offer mortgage assistance perks, low-interest loans, down payment help, or special partnerships with lenders. It’s not talked about much because people forget to check their HR departments for benefits beyond health insurance.
If your employer has a program, it can knock points off your rate or cover upfront costs. It’s another tool most people leave unused simply because they didn’t think to ask. One email to HR could save you thousands.
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Seasonal Promotions: Timing Matters
Here’s something no one thinks about. Mortgage lenders are like any business, they have slow seasons. Winter months, holidays, early spring before the buying rush starts, these are times when lenders might quietly offer promotions to fill the pipeline.
Reduced rates, waived fees, special terms. You won’t see big billboards shouting about it, but ask lenders directly if they’ve got seasonal specials.
It’s all about timing, and a little patience can land you a better deal just because you bought at the right moment.
Use Home Equity Wisely (for Refinancing)
Already own a home and sitting on some equity? Don’t let it gather dust. You can refinance your current mortgage at a better rate or tap into a home equity line of credit (HELOC), which sometimes offers lower rates compared to taking out a brand-new loan.
If rates drop later, refinancing can lock in savings. And if you’ve got enough equity, lenders see you as low risk, better terms, better offers. Your current home can be the key to securing smarter financing for the next one.
Locking In the Smartest Rate Possible
Interest rates aren’t some untouchable force, there’s always a way to work the system to your advantage. The lenders, brokers, and banks won’t tell you, but smart borrowers know how to cut their rate without playing their game.
Everything I’ve shared, negotiation, assumable loans, credit unions, seller financing, isn’t theory. I’ve used many of these moves myself, and they work. You don’t have to accept whatever number gets thrown at you.
The key is knowing your options and not being afraid to ask. Play smart, not hard, and watch how much you save.
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