7 ways to get a lower mortgage rate in 2025

Mortgage interest rates are up again, making it expensive for most people to buy a home. The Federal Reserve is expected to cut interest rates twice in 2025, but another rate cut may not be coming for a few months. 

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

Start by seeing what mortgage interest rate you qualify for here now.

7 ways to get a lower mortgage rate in 2025

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

Do your research

Mark Worthington, branch manager at Churchill Mortgage, says preparation is key to finding the lowest mortgage rates. “The place to start is by doing research to discover which mortgage companies have the best reviews and most options,” he recommends. “Next, take a hard look at the options, as the details truly matter. If you are only presented with one or two options, be very cautious.” 

Shop around

It’s hard to find the best mortgage rates if you don’t first set time aside to research and explore all of your different lending options.

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

Start shopping for mortgage lenders online now.

Improve your credit score

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

To improve your credit, Parangi recommends paying down high-interest credit card debt and avoiding opening any new credit accounts. It’s also important to avoid late payments since your payment history makes up around 35% of your FICO score. 

Make a higher down payment

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Making a higher down payment can help lower your mortgage interest rates in several ways. “A bigger down payment reduces the loan-to-value (LTV) ratio, making you a less risky borrower in the eyes of lenders,” says Parangi. Plus, if your down payment is at least 20%, you won’t have to extra to cover your private mortgage insurance (PMI). 

Consider different loan terms

Being open to different loan terms is another way to save on your interest rate. For example, choosing 15-year loan terms could significantly lower your interest rate. According to data from Freddie Mac, the average rate for a 15-year mortgage is 6.13% as of Jan. 2, 2025. In comparison, the average 30-year mortgage is 6.90%.

Lock in your rate

A rate lock means your mortgage interest rate won’t change for a certain period of time, assuming your financial situation stays the same. If there is a mortgage interest rate drop but you’re concerned they might go back up due to inflation or other factors, Parangi says to consider locking in your rate early.

Consider buying mortgage points

Finally, you can also consider buying mortgage points, though this option will cost you money upfront. One mortgage point typically costs 1% of the total loan amount, reducing your rate by 0.25%. 

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

The bottom line

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