8 Ways to Lock In the Lowest Mortgage Rate in 2026

8 Ways to Lock In the Lowest Mortgage Rate in 2026

Mortgage rates have cooled significantly compared to early 2025, and with the right strategy, you can still qualify for a rate below today’s national average. Here are eight practical approaches to securing the lowest possible mortgage rate in the 2026 market.

Which lenders typically offer the lowest rates?

An analysis of nearly 5,000 lenders reporting 2024 data under the Home Mortgage Disclosure Act suggests the most competitive rates often come from large national banks, credit unions, and homebuilders that finance their own properties.

Because mortgage pricing changes frequently—and varies by lender—the best rate for you will depend on your borrower profile. Before you shop, get clear on your credit score, debt-to-income (DTI) ratio, and down payment. Then request quotes from multiple lenders based on where you plan to buy and your target price range. Once you narrow it down to a few strong options, seek preapproval to get more accurate rate offers.

If you aren’t buying new construction with built-in incentives and you’re not eligible for special credit union pricing, the strategies below can still help you qualify for a lower rate through mainstream lenders.

1. Improve your credit score

Mortgage rates are strongly tied to credit score tiers. Even a modest increase can move you into a better pricing band and reduce your interest rate.

For example, a borrower around the 620 level may qualify for a meaningfully higher rate than someone who moves into the next credit bracket. The higher your score, the more leverage you typically have when comparing offers.

2. Lower your debt-to-income ratio

DTI is another major input in rate-setting. The more monthly debt you carry relative to income, the riskier you appear to a lender—and the higher your rate may be.

To calculate DTI, divide total monthly debt payments by gross monthly income. For instance, if monthly debts total $1,100 and gross income is $5,000:

5000 / 1100​ = 0.22 (22%)

For the best pricing, aim for a DTI around 25% or lower. While some lenders allow higher DTIs, lower ratios tend to receive the most favorable rates.

3. Make a larger down payment

Bigger down payments often translate into lower rates because they reduce the lender’s risk. While some loans allow low down payments, putting more down can improve your loan terms and may also reduce costs like mortgage insurance.

4. Buy discount points

Discount points are prepaid interest paid upfront in exchange for a lower ongoing rate. In many cases, one point equals 1% of the loan amount and may reduce your rate by about 0.25%, though exact pricing varies.

Before buying points, run the math:

• How much will the points cost at closing?
• How long do you expect to keep the loan?
• When does the monthly savings “break even” versus paying nothing upfront?

Also, when comparing lenders, ask for quotes at zero points so you’re comparing apples to apples, then decide whether paying points makes sense.

5. Use an interest-rate buydown (when available)

A rate buydown reduces your interest rate temporarily—often for the first one to three years of the loan. Builders and sellers sometimes offer buydowns as an incentive, and some lenders make them available as an option.

Example: a buydown might reduce a 7% rate to 6.5% for the first two years.

It can be a useful tool, but it’s not automatically a better deal. Always compare the loan with and without the buydown, watch for offsetting fees, and plan for the payment increase once the reduced-rate period ends. Keep in mind lenders generally qualify you based on the permanent rate, not the temporary discounted rate.

6. Consider an adjustable-rate mortgage (ARM)

ARMs typically start with a fixed introductory rate for a set period (often 3–10 years), then adjust at scheduled intervals.

If you’re considering an ARM:

• Look for an intro rate that’s meaningfully lower than a fixed-rate alternative.
• Choose an intro period that matches how long you expect to stay in the home.
• Budget for potential payment increases after the fixed period ends.

ARMs can reduce initial costs, but they carry more uncertainty, so the structure and caps matter.

7. Choose a shorter loan term

Shorter-term loans—such as 15- or 20-year fixed mortgages—often come with lower interest rates than 30-year mortgages and build equity faster. The tradeoff is higher monthly payments, so it works best if your budget can handle the larger payment comfortably.

8. Look for an assumable mortgage

An assumable mortgage lets a buyer take over the seller’s existing loan and interest rate. This can be especially appealing if the current loan rate is lower than today’s market rates.

However, many conventional loans aren’t assumable. Assumable options are more common with government-backed loans, and buyers typically need cash (or financing) to cover the seller’s equity.

Can you still get a lower rate after you buy?

Many homeowners already have rates far below current market pricing, which can make refinancing unattractive today. Still, mortgages are long-term commitments and rates move in cycles. If rates fall meaningfully—often around 1% to 2% below your current rate—it may be worth evaluating a refinance, especially after accounting for closing costs and your goal (lower payment vs. faster payoff).

FAQs

What’s the lowest mortgage rate ever?

The lowest widely reported average 30-year mortgage rate was 2.65% in January 2021, according to Freddie Mac.

Will mortgage rates ever drop back to 3%?

It’s possible, but unlikely without a major economic disruption.

Which mortgage loans usually have the lowest rates?

Government-backed loans can be competitive, and shorter-term loans (like 15-year terms) typically carry lower rates than longer-term loans.