Mortgage rates change daily and vary by lender, so the best rate for you depends on your credit score, down payment, loan type, and how long you plan to stay in the home
No single bank has the best rates for everyone. A rate that is lowest at Bank A might be higher at Bank B for a different loan term or credit profile. What matters is comparing offers from multiple lenders using the same loan details—same down payment percentage, same loan term (15-year or 30-year), same property type—so you see real differences, not just marketing claims.
Rates also move constantly. A rate you see quoted online this morning may be different by afternoon. Lenders lock rates for a set period (usually 30 to 60 days) once you formally request one, but the published rates they advertise change based on market conditions, not on how good their customer service is or how many branches they have.
The fastest way to find your actual rate is to request quotes from at least three lenders—a national bank, a credit union if you belong to one, and a mortgage broker or online lender. Each will ask the same questions about your income, credit, and the property, then give you a Loan Estimate within three business days. That document shows the interest rate, the annual percentage rate (APR), and all fees. Compare the APR across estimates, not just the interest rate, because APR includes lender fees and gives you the true cost.
Key Takeaways
- The best mortgage rate for you depends on your credit score, down payment size, and loan term, so rates that are lowest for one borrower may be higher for another.
- Request Loan Estimates from at least three different lenders using identical loan details so you can see real rate differences, not just marketing variation.
- Compare the annual percentage rate (APR) on each Loan Estimate, not the advertised interest rate, because APR includes all lender fees.
- Mortgage rates change daily and are locked only after you formally request a rate lock, which typically lasts 30 to 60 days.
- Credit unions and online lenders often have lower rates than large national banks, but you need to request quotes to know your actual rate.
Where rates come from and why they differ between lenders
Mortgage rates are tied to the 10-year Treasury bond yield, which moves based on economic conditions and Federal Reserve policy. All lenders see the same market rate, but they add different markups—called the loan origination fee or discount points—to cover their costs and profit. A lender with lower overhead may charge less markup than a bank with hundreds of branches.
Your personal rate also depends on risk factors the lender assesses: your credit score, your debt-to-income ratio, the size of your down payment, and the loan-to-value ratio (how much you are borrowing compared to the home's value). A borrower with a 750 credit score and 20 percent down will get a lower rate than one with a 650 score and 5 percent down, even from the same lender.
Loan type matters too. A conventional loan (not backed by the government) typically has a lower rate than an FHA loan (backed by the Federal Housing Administration) because FHA loans carry mortgage insurance and are available to borrowers with lower credit scores. A VA loan (for military members and veterans) often has the lowest rates because the Department of Veterans Affairs guarantees the loan.
How to request and compare Loan Estimates
Start by gathering information about yourself: your credit score (you can check it free at annualcreditreport.com), your income, your debts, and how much you plan to put down. Then contact at least three lenders and ask for a Loan Estimate. You can do this online, by phone, or in person. The lender is required by law to send you a Loan Estimate within three business days.
When you receive each Loan Estimate, look at page one for the interest rate and APR. The APR is the number to compare across lenders because it includes the interest rate plus origination fees, discount points, and other lender charges. A lender advertising a 6.5 percent interest rate might have an APR of 6.8 percent after fees; another lender's 6.6 percent rate might have an APR of 6.7 percent. The second lender is cheaper, even though the advertised rate is higher.
Also check the loan term (15-year or 30-year), the loan amount, and the property address to make sure each Loan Estimate is for the same loan. If they differ, the rates are not comparable. Page three of the Loan Estimate lists all closing costs—title insurance, appraisal, attorney fees, property taxes, homeowners insurance—so you can see the total out-of-pocket cost at closing, not just the monthly payment.
Types of lenders and where to find them
National banks (Chase, Bank of America, Wells Fargo) have the most branches and the most marketing, but they do not always have the lowest rates. They are convenient if you already bank there and want to do everything in one place, but you should still request quotes from other sources to compare.
Credit unions often have lower rates than banks because they are member-owned and not-for-profit. You must be a member to borrow from them, but membership is sometimes free or low-cost. If you work for a large employer, belong to a professional association, or live in a certain area, you may already be a member of a credit union without knowing it. Search for your name at creditunionmembersearch.com to find out.
Online lenders and mortgage brokers have no physical branches, so their overhead is lower and rates are often competitive. Online lenders like Better, LoanDepot, and Rocket Mortgage let you apply and upload documents entirely online. Mortgage brokers work with multiple lenders and can shop your application to several at once, which can save time. Both types are regulated and must provide Loan Estimates the same way banks do.
Portfolio lenders keep loans on their own books instead of selling them to investors, which means they can be more flexible with credit scores or down payments. They are less common and may charge higher rates to offset the risk, but they are worth contacting if you have an unusual financial situation.
What affects your personal rate within each lender
Your credit score is the single biggest factor. Most lenders offer their best rates to borrowers with scores of 740 or higher. For every 20-point drop below 740, your rate typically goes up by 0.25 to 0.5 percent. A borrower with a 700 score might pay 0.5 percent more than one with a 760 score on the same loan, which adds up to tens of thousands of dollars over 30 years.
Your down payment size also moves the rate. A 20 percent down payment usually gets a better rate than a 10 percent down payment because you are borrowing less relative to the home's value. If you put down less than 20 percent, you will pay for private mortgage insurance (PMI), which is added to your monthly payment and also affects the rate the lender offers.
Your debt-to-income ratio—the percentage of your gross monthly income that goes to all debts (car loans, credit cards, student loans, and the new mortgage)—also matters. Lenders prefer a ratio below 43 percent. If your ratio is higher, some lenders will charge more or decline to lend at all. Paying down credit card balances before you apply can lower your ratio and improve your rate.
The loan term you choose affects the rate too. A 15-year mortgage has a lower interest rate than a 30-year mortgage on the same day from the same lender, but the monthly payment is much higher because you are paying off the loan in half the time. A 30-year mortgage has a higher rate but a lower monthly payment, so you pay more interest overall but less each month.
Rate locks and how long they last
Once you request a rate lock, the lender freezes your interest rate for a set period. Standard lock periods are 30, 45, or 60 days. If rates go up during that time, your rate stays the same. If rates go down, you are stuck with the higher rate unless you pay a fee to float down (if the lender offers that option).
You do not pay for a rate lock—it is included when you formally request one. But locking too early can be risky: if your loan takes longer to close than expected, your lock expires and you have to pay to extend it or accept a new rate. Most lenders recommend locking when you are within 30 to 45 days of closing.
Some lenders offer a float-down option, which lets you lock a rate but still benefit if rates drop before closing. This costs extra (usually 0.25 to 0.5 percent of the loan amount) but protects you if the market moves in your favor. It is worth asking about if you are locking in a high-rate environment and rates are expected to fall.
How to use rate quotes to negotiate
Once you have Loan Estimates from multiple lenders, you can use them to negotiate. If Lender A has a lower APR than Lender B, show Lender B the estimate and ask if they can match it. Many lenders will lower their origination fee or discount points to win your business, especially if you are a strong borrower.
Do not ask a lender to match the interest rate itself—that is set by the market and your risk profile. But you can ask them to reduce the origination fee, waive the application fee, or credit you points toward closing costs. Some lenders will do this; others will not. It costs nothing to ask.
Also ask each lender about any special programs you might may have access to for. Some lenders offer lower rates for borrowers who set up automatic payments, or for first-time homebuyers, or for loans under a certain amount. These programs are not always advertised, so you have to ask directly.
Red flags and common mistakes to avoid
Do not rely on advertised rates you see online or in ads. Those rates are usually the lowest possible rate for the best-may have access to borrower (excellent credit, large down payment, ideal debt-to-income ratio). Your actual rate will likely be higher. The only rate that matters is the one on your Loan Estimate.
Do not lock your rate too early or too late. Locking too early means paying to extend the lock if closing takes longer. Locking too late means you might miss a good rate if the market moves up before you lock. Most borrowers lock within 30 to 45 days of their expected closing date.
Do not compare interest rates across lenders without also comparing APR and closing costs. A lender with a 0.1 percent lower interest rate might charge $2,000 more in origination fees, making them more expensive overall. The Loan Estimate shows the full picture.
Do not apply for new credit (car loans, credit cards, store cards) while you are shopping for a mortgage. Each application triggers a hard inquiry on your credit report, which can lower your score by a few points and make lenders view you as riskier. Multiple inquiries in a short time (within 14 to 45 days, depending on the scoring model) usually count as one inquiry, so shopping around for mortgage quotes does not hurt your score—but other credit applications do.
Frequently Asked Questions
Do I have to use my bank for a mortgage?
No. You can borrow from any lender—bank, credit union, online lender, or broker—regardless of where you have a checking account. Shopping around is the best way to find a lower rate, and most borrowers save money by comparing at least three lenders.
What is the difference between a mortgage broker and a lender?
A lender (bank, credit union, online company) funds the loan directly. A broker is a middleman who takes your application and shops it to multiple lenders, then passes the loan to one of them to fund. Brokers can be faster if you have an unusual situation, but they charge a fee (usually built into the rate or closing costs).
Can I lock a rate without committing to a lender?
Yes. A rate lock is not a commitment to close the loan—it just freezes your rate for a set period. You can lock a rate, continue shopping, and change lenders before closing if you find a better deal. But if you lock with Lender A and then switch to Lender B, Lender A may charge a fee to cancel the lock.
How much does my credit score have to be to get a good mortgage rate?
Most lenders offer their best rates to borrowers with scores of 740 or higher. You can still borrow with a lower score, but your rate will be higher. FHA loans are available to borrowers with scores as low as 580, but the rate is higher and you pay mortgage insurance.
Should I pay points to lower my interest rate?
Discount points (paying money upfront to lower your rate) make sense only if you plan to stay in the home long enough to recoup the cost. If you pay $3,000 in points to save 0.5 percent on a $300,000 loan, it takes about five years to break even. If you might move or refinance sooner, skip the points.