Key Takeaways
- Rates on new 30-year mortgages have moved between 6% and 8% for almost all of the last two-and-a-half-years.
- It’s unclear when—or even if—mortgage rates will fall significantly from these levels in the foreseeable future.
- But wherever mortgage rates stand, you can reduce the rate you personally pay by improving your credit score, paying down debt, saving more for a down payment, and shopping around.
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Try These Smart Strategies to Combat Today’s Elevated Mortgage Rates
Almost continuously since September 2022, the national average rate for a 30-year new purchase mortgage has wavered between 6% and 8%. It did slip into upper-5% territory a few days in the last two-and-a-half years, and it reached as high as 8.01% in October 2023. But largely it’s been in the 6% to 8% range.
That’s a dramatic departure from 2021, when 30-year rates averaged below 3% for most of the second half of the year.
Unfortunately, a return to significantly lower rates appears very unlikely in the current economic environment. In fact, Wells Fargo recently forecasted that mortgage rates will remain above 6% through 2026.
While that’s not stellar news if you want to buy a new home, you aren’t powerless. In fact, four key moves can help you get the best rate available—all of which are smart since reducing your rate by a half or even a quarter point can translate into lower monthly payments and, over time, significantly reduced total interest costs.
Smart Strategy #1: Improve Your Credit Score
Mortgage rates are not “one size fits all.” What a given lender offers you is a function of how much you’re borrowing, your income, your assets, and, to a large extent, what kind of credit risk you represent. Buyers with a higher credit score will be offered more favorable mortgage rates, while those with a low credit score will be asked to pay a higher rate.
“Your credit score is one way of measuring how likely you are to pay your bills,” said Samir Patel, senior vice president of loans at Discover. “The higher your credit score, the better your chances of approval at a favorable interest rate for many types of loans—from personal loans to primary mortgages, home equity loans, and mortgage refinances.”
Sometimes it’s possible to boost your credit score by a modest margin very quickly, while larger improvements may take more time. Since any mortgage rate you lock in is a long-term rate, it can be worth delaying your home buying until you’ve made some strategic credit score-enhancing moves.
Whatever your timeline, the top ways to boost your score before presenting a mortgage application to lenders are building up a longer track record of on-time payments, paying off or reducing one or more debts to lower your credit utilization percentage, and not applying for any new loans or credit cards while you are house hunting.
“I always encourage consumers to check their credit report before applying for a home loan,” Patel said. “By double checking for any errors and fixing them, consumers can help put themselves in a position for the best interest rate on a home loan.”
Tip
In the past, you could only request a free copy of your credit report from each credit reporting agency once per year. But that has changed, allowing consumers to get a free copy from each agency as frequently as once per week, reducing how long you have to wait to pull another report when you are watching for changes.
Smart Strategy #2: Pay Down Debt
Reducing what you owe on any loans or credit cards can help increase your credit score, as discussed above. But in terms of applying for a mortgage, it can do double duty. The reason is that mortgage lenders base their offers on something called a debt-to-income ratio (DTI). The DTI calculates your total debts as a proportion of your monthly income, where a higher proportion of debt classifies you as a riskier applicant, while someone with a lower DTI will be deemed a safer bet among lenders.
If you’re like most house hunters, you can’t substantially change your income in a short time frame before applying for a mortgage. But by lowering your debt, your DTI ratio will go down—making your mortgage application less risky for lenders and typically translating into a better mortgage rate for you.
Smart Strategy #3: Save for a Bigger Down Payment
Though it may be appealing to get into a new house as soon as possible, or utilize a “low down payment” program, there are good reasons to pause your purchase until you can save more money to put down.
First and foremost, a bigger down payment means you’ll be asking for a lower loan amount—which in turn will lower the monthly payment on your new loan. A smaller loan can also help improve your DTI ratio, discussed above, which may help you score a better rate from your lender.
If you already have a sizable pot of savings for a home and are within reach of a 20% down payment, you may want to save a little longer so that you can avoid the extra monthly cost of private mortgage insurance (PMI). If you currently only have, say, a 5% down payment saved, then avoiding PMI is not likely possible unless you defer your house hunt for an extended period. But if you find you have 15% or more saved, it could be worth waiting until you can reach the PMI-avoiding 20% mark.
A third way that saving more can help you snag a better mortgage rate is that it makes it possible for you to consider buying mortgage discount points. Points work by requiring an upfront payment in exchange for lowering your long-term mortgage rate. If you have ample funds saved before applying for a mortgage, you may have enough cash on hand to entertain various discount point options.
Smart Strategy #4: Shop Around on Rates
The above strategies are smart to do first, so we’re listing this one last, but it’s very important: The recommendation to shop around on rates cannot be overstated. When you’re ready to submit a mortgage application, it’s critical you do some homework to make sure you get a good rate.
While checking local banks and credit unions is always smart, it shouldn’t be your only foray. Also consider online lenders or big institutions that don’t have a physical footprint in your own community. You can also consider a mortgage broker, which can help you with the paperwork and link you to one of a variety of lenders in their network.
Choosing your timing to lock in a rate is also important, and we make it easy to follow mortgage rate trends—nationally and by state—with our daily mortgage rate coverage linked below.
How We Track the Best Mortgage Rates
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.