How to Get the Best Mortgage Rates

Ask a Lender ranks the nation's best mortgage lenders to help you get the lowest mortgage rate in your local market

Find Your Best Mortgage Rate

Checking out daily mortgage rates online is a common starting point if you’re buying a home, refinancing a mortgage or trying to get cash from your home equity. Although advertised rates may appear attractive, you ―  like many people ― won’t know what mortgage rate you will get until you talk with several mortgage lenders and compare rates. 

There are many variables that contribute to how lenders assess and price your risk and come up with the lowest mortgage rate they can offer you. In addition, mortgage rate trends are constantly changing, so you will need to have the knowledge and experience of a mortgage broker or lender who is capable of providing informed advice on how you can lock the best mortgage rate for you.


Current Mortgage Rates

High 4% for 30-year term

Rate Shopping

Compare at least three mortgage rate offers

Factors to Consider

Credit score, down payment, debt-to-income ratio, employment, property use, lender parameters

Find the Best Mortgage Lenders Near You

Excellence matters. To get the best mortgage rate, work with one of the best mortgage brokers and loan officers in your local market. Ask a Lender has recognized this need and put together the nation's most comprehensive rankings of the best mortgage lenders across various loan types. To make it even easier, you can browse the rankings by state and city.

Best Mortgage Lenders

Best Mortgage Lenders

Ranked by their total number of home loans

Meet the Best

Best Mortgage Refinance Lenders

Best Mortgage Refinance Lenders

Ranked by their number of refinance loans

Meet the Best

Best First-Time Homebuyer Lenders

Best First-Time Homebuyer Lenders

Ranked by the number of home-purchase loans

Meet the Best

Best Mortgage Brokers

Best Mortgage Brokers

Ranked by their total number of home loans

Meet the Best

Best Low Down Payment Lenders

Best Low Down Payment Lenders

Ranked by their total number of home loans

Meet the Best

Best Home Equity Line of Credit Lenders

Best Home Equity Line of Credit Lenders

Ranked by their HELOC dollar volume

Meet the Best

Best Low-Credit Mortgage Lenders

Best Low-Credit Mortgage Lenders

Ranked by their total number of home loans

Meet the Best

Best USDA Home Loan Lenders

Best USDA Home Loan Lenders

Ranked by their USDA dollar volume

Meet the Best

Best VA Mortgage Lenders

Best VA Mortgage Lenders

Ranked by their VA dollar volume

Meet the Best

Best FHA Mortgage Lenders

Best FHA Mortgage Lenders

Ranked by their FHA dollar volume

Meet the Best

How Mortgage Rates Work

To plan for your home loan, be sure you understand how mortgage rates work and what lenders consider when they review a borrower. Mortgage lenders are allowed to use risk-based pricing, which means they may offer you a higher mortgage rate than their advertised rates if you’re perceived to be a higher risk.  

To get a realistic mortgage rate, you cannot rely on advertised rates because they don’t take into consideration the many factors that lenders consider when they price a home-loan rate, and therefore they are typically much lower than what most borrowers are likely to get. For example, lenders look into all of the following factors.

Credit Score

To get the best interest rate, you need an excellent FICO credit score that is as high as 800 ― or even higher. Mortgage lenders increase rates quickly for borrowers who have lower credit scores because they are perceived to be a higher risk. 

Down Payment

Want the lowest current mortgage rates? Put more money down. Although you can get a government-backed home loan with a down payment as low as 3.5 percent or even no money down, you’re likely to get a lower rate on a conventional loan if you put more money down. A higher down payment simply reduces the loan-to-value ratio, or the amount you’re borrowing compared to the value of the house. 

Debt-to-Income (DTI) Ratio

Mortgage lenders look into how much debt you’re carrying, which includes credit card balances, car loans, personal loans and any mortgage loans. If your debt makes up a high percentage of your income (typically higher than 43 percent), you are perceived as a higher risk, and lenders will increase your rate.

Employment and Income

Having more income is good in reducing debt-to-income ratio, but lenders also look at income stability through employment. If you have a stable job and worked with the same employer for more than a year (or multiple years), you are seen as less risky than someone in their first job who has only been working for an employer for a few months. Just changing jobs can increase your risk, even if that job is higher-paying.

Property Use 

Lenders consider a home a loan on a primary residence as lower risk than mortgage loans on vacation homes or investment homes. People live in their primary residence and are thus less likely to default on the loan because they will be out on the streets. Loans on primary residences tend to get lower mortgage rates than those for second homes or investment properties.

Competition

Large and small mortgage lenders have their parameters for providing competitive mortgage rates based on their perceived market competition. Large, national companies with ready-made name recognition don’t have competitive advantage to lowering pricing, especially if you’re not comparing mortgage rates or pushing for a lower rate. 

What is a mortgage rate?

A mortgage rate is the amount of interest paid on your home loan. It is typically expressed in an Annual Percentage Rate (APR) because it includes the interest rate in addition to mortgage broker’s fees, any lender points and other loan charges. A small increase in the percentage can cost you thousands of dollars over the life of the loan.

Find the Best Mortgage Lenders Near You

Mortgage Rates: Too Low to be True

A quick search online for today’s mortgage rates can yield results that appear to be too good ― or too low ― to be true. And they probably are. Some mortgage lenders use a bait-and-switch technique that lures you in with low rates to get you to contact them, but because they are legally allowed to use risk-based pricing, most borrowers find their quoted rate is much higher than the advertised rate.

That is why the only way for you to get a true mortgage rate is to contact several lenders and shop your rate. In addition, you must be able to compare apples to apples. For example, a low rate on a no-cost mortgage refinance could be solely available for refinances that don’t provide lender credits. Because you’re likely to want the lender credits to offset the closing costs, your rate can be much higher than an advertised rate. 

The bottom line: Know what is included in your mortgage rate when you’re comparing offers. In particular, pay attention to the following components of mortgage rates.

  • Interest rate: If you apply for a loan, you will receive a Loan Estimate. The interest rate is listed on the first page. If you don’t have a Loan Estimate, inquire about the interest rate portion of your APR.
  • Lender points and credits: Lender discount points and credits give you some flexibility in how you repay your mortgage. You can lower your interest rate in exchange for a fee. Lender credits help you lower your closing costs in exchange for accepting a higher interest rate. 
  • Fees and charges: Look out for the origination fees as well as any other charges that could significantly differ from one lender to another. 

Is Your Rate Fixed or Not?

When you shop your rate, make sure you’re comparing the same type of Annual Percentage Rate (APR). APRs on fixed-rate home loans can be much different from APRs on adjustable-rate loans. 

How to Shop Your Mortgage Rate

To get the best mortgage rate, you must shop your loan. Surprisingly, many people don’t. In fact, a study by the Consumer Financial Protection Bureau in 2015 found nearly half (47 percent) of homebuyers don’t compare lenders before applying for a loan.

Many people might be overwhelmed by the process or shy away from shopping their loan because they don’t know how to go about it. Fortunately, Ask a Lender can help get mortgage lenders to compete for your business and give you the lowest mortgage rate. 

If you want to get the lowest mortgage rate for your loan, search for mortgage lenders on Ask a Lender now. Contact at least three lenders and request rate quotes. Do your research and find out which one is best for you. 

Borrow Wisely Tip

How to Get a Lower Rate

  • Compare at least three mortgage rate offers.
  • Consider various loan types, if you qualify for them, like VA loans.
  • Wait and improve your credit score and income.
  • Don’t take on new debt before or while applying for a home loan.

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