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Over the last several years, record-high home prices and high mortgage rates have made homeownership unaffordable. As 30-year fixed mortgage rates remain flat near 7%, homebuyers have been finding creative ways to score rates below what lenders advertise.
Last year, nearly half of buyers purchased a home at a rate below 5%, according to Zillow.
"With borrowing costs elevated, buyers can take steps to reduce their housing expenses by securing a lower mortgage rate," said Hannah Jones, senior research analyst at Realtor.com.
The market forces that influence mortgage rates are out of your control. Yet proven strategies like optimizing your credit score, making a larger down payment, shopping around and negotiating with multiple lenders can save you up to 1.5% on your personalized rate.
Mortgage rates aren't expected to drop below 6% in 2025. Snagging even a 1% reduction in your rate can translate to about 10% savings on your monthly mortgage payment and tens of thousands of dollars in savings over the course of your loan.
Here's how homebuyers can get lower interest rates in today's housing market.
1. Increase your credit score
If your credit needs work, consider taking steps to raise your credit score before applying for a mortgage.
Lenders look at your credit score to decide whether you qualify for a home loan and what interest rate you receive. FICO credit scores range from 300 to 850, with 850 being the best score possible. Higher credit scores show you've managed debt responsibly in the past, so it lowers your risk to a lender. This can help you secure a lower interest rate and save big.
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