7 Ways to Get a Lower Mortgage Rate in 2025

Mortgage interest rates have risen again, making buying a home expensive for most people. The Federal Reserve is expected to cut interest rates twice in 2025, but another rate cut may not come for several months.

Plus, you can’t and shouldn’t always wait Interest rates fall before you buy a house. Below, we take a look at seven strategies you can use to find low mortgage rates in the current economic environment.

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7 Ways to Get a Lower Mortgage Rate in 2025

Here are some ways to get a below-average mortgage rate this year, according to the experts we spoke to:

Do your research

Mark Worthington, branch manager at Churchill Mortgage, says preparation is key to finding the lowest price Mortgage interest rates. “The place to start is to do some research to find out which mortgage lenders have the best reviews and the most options,” he recommends. “Next, take a close look at the options because it really comes down to the details. If you only see one or two options, be very careful.”

Shop around

It’s hard to find the best Mortgage interest rates if you don’t first take the time to research and explore all of your different loan options.

Steven Parangi, mortgage broker and owner of Alpine Mortgage, says comparing offers is key to finding the best deal for your loan terms. “In today’s market, I think one of the biggest mistakes buyers make is accepting the first interest rate offered. Even a tiny difference in interest rates can save you thousands of dollars over the life of the loan.”

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Improve your credit score

“Lenders offer the best interest rates to borrowers with good credit,” says Parangi. Conventional loans typically mean a credit score of at least 620, but you’ll need a credit score of 740 or higher to qualify for the best interest rates.

To Improve your credit ratingParangi recommends paying off high-interest credit card debt and avoiding opening new credit accounts. It’s also important to avoid late payments, as your payment history accounts for about 35% of your FICO score.

Make a larger deposit

A larger down payment can help Lower your mortgage interest rates in several ways. “A larger down payment reduces your loan-to-value (LTV) ratio and makes you a less risky borrower in the eyes of lenders,” says Parangi. And if your deposit is at least 20%, you won’t have to pay any additional costs to cover your balance private mortgage insurance (PMI).

Consider different loan terms and conditions

Being open to different loan conditions is another way to save on interest. For example, if you choose a 15-year loan term, this could significantly lower your interest rate. According to Freddie Mac, the average interest rate for a 15-year mortgage as of January 2, 2025 is 6.13%. In comparison, the average interest rate for a 30-year mortgage is 6.90%.

Secure your tariff

A fixed rate means that your mortgage interest rate will not change for a certain period of time as long as your financial situation remains the same. If the mortgage rate goes down, but you’re worried it might go up again inflation or other factors, Parangi says you should consider locking in your rate early.

Consider purchasing mortgage points

Finally, you can also think about it Purchase of mortgage pointshowever, this option will cost you money upfront. One mortgage point typically costs 1% of the total loan amount, which reduces your interest rate by 0.25%.

So if you buy a home for $420,000, you’ll pay $4,200 for one mortgage point. “This is a good strategy if you plan to stay in the house long enough to recoup the upfront costs through monthly savings,” says Parangi.

The end result

“The takeaway for buyers in 2025 is: be proactive,” he added. “Start working on your financial profile early, explore all your options and don’t take the first offer you get. In today’s market, getting the best mortgage rate isn’t a matter of luck, it’s a matter of plan.”