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Yes, You Can Negotiate Your Mortgage Rate: 8 Things To Keep In Mind

Understanding these truths can earn you lower home loan costs.

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Updated April 10, 2025
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Are you looking for a new mortgage? Making some smart money moves for homeowners — such as negotiating your mortgage rate — can help you lower costs.

Not everyone realizes that you can negotiate your mortgage rate, but it is possible. Keep these things in mind when trying to negotiate your mortgage interest rate.

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Know the mortgage terms you need

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Before negotiating loan terms, it's best to know what exactly you're looking for. Both first-time buyers and seasoned homeowners can benefit from doing research about which loan type best fits their needs.

Higher down payment amounts and shorter loan terms can often help reduce your mortgage rate and keep more cash in your wallet.

Understand that posted interest rates are negotiable

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Published mortgage rates are not always the rate that you actually end up paying. It's important to understand the posted interest rate is a place to start your negotiating.

The best rates are usually reserved for buyers with the best credit. The more qualified you are, the more negotiating power you will have. Lenders seek low-risk buyers because there is a higher chance that such buyers will pay the loan back without issue.

Always shop around for the best terms

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Shopping around for a mortgage is one of the best ways to get a good rate. By getting quotes from multiple lenders, you can find the best terms available to you.

However, make sure to do your shopping all at the same time. If you gather rate quotes within a period of a couple of weeks, your credit score is unlikely to suffer a big hit. By contrast, stretching rate quotes out over a longer period might damage your credit.

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Keep an eye out for hidden fees

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Mortgage lenders sometimes advertise low interest rates to get customers in the door. However, potential borrowers might not realize that the low rate also comes with discount points and other fees.

Check your loan carefully to make sure you're getting a complete picture of your costs. A low rate won't save you as much as you think if you are paying excessive fees.

Understand who controls closing costs

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Lenders don't control all closing costs. For example, escrow fees include things such as property taxes and homeowners insurance premiums. The lender has nothing to do with these fees.

That means the estimate a lender gives you for closing costs might be lower than what you will actually pay. Be aware of this possibility and financially ready to pay a bit more than you expect.

Consider using a mortgage broker

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Mortgage brokers access mortgage products from a wide variety of lenders all at once. Rather than getting individual quotes from each bank, you can use a mortgage broker to compare costs and rates from multiple lenders.

A broker may also alert you to first-time homebuyer programs or other cost savings available in your area.

Work on raising your credit score

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Your credit score usually reflects your ability to manage and pay back your debt. That means raising your credit score can help you secure the best mortgage interest rates from lenders.

You can improve your credit score by making on-time payments, reducing your balances, and keeping lender credit inquiries to a minimum.

Consider locking in your rate

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Locking in your rate means that it won't change before your closing. Mortgage interest rates change daily, so until you're locked in, your rate is subject to change.

Locking in a rate could save you money, especially if interest rates increase before your closing date.

Bottom line

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Whether you're refinancing an existing mortgage or buying a home for the first time, negotiating your interest rate can save you thousands of dollars over the lifetime of your loan.

You can use that extra money to help pay for your bills or save for retirement. Keeping the items on this list in mind can help improve your odds of securing the best mortgage rate.

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