In 2025, buying a home may be fun but also hard, especially when mortgage rates shift when the economy does. Getting a low interest rate on your home loan may save you tens of thousands of dollars over the life of the loan. The good news is? If you make some smart actions, you can hack the system and receive the greatest bargain on your mortgage.
Here are some useful tips for getting a good mortgage rate in 2025.
1. Be very familiar with your credit score
When lenders give you a mortgage rate, they look at your credit score as one of the most important things. If you have a higher credit score, you will normally pay less in interest. Get a free copy of your credit report and verify your score before you apply for a mortgage.
If your score isn’t as high as you’d want, do anything to raise it. Pay off your credit card debt, don’t open any new lines of credit, and repair any mistakes on your credit record. Even a modest increase might make a big difference in your mortgage rate.
2. Look around for lenders
Don’t just choose your bank or the first lender you talk to. Different lenders have different mortgage rates, and some even provide special deals or discounts. You may use internet tools to look at rates from other lenders, such as credit unions, online lenders, and regular banks.
Getting more than one quotation not only helps you get a better rate, but it also offers you more power when you talk to lenders.
3. Think about paying points to get a lower rate.
Mortgage points are expenses you pay up ahead to lower your interest rate. If you expect to stay in your house for a long time, this might be a good idea because the savings will mount up over time.
Before you buy points, figure out the break-even point to make sure it makes sense financially. Paying points might help you save hundreds of dollars a month on your mortgage payment.
4. Lock in your rate at the right time
Rates on mortgages can fluctuate every day or even every hour. Once you find a good rate, ask your lender how to lock it in. Rate locks usually last between 30 and 60 days, which keeps your interest rate from going up while your loan is being processed.
Be smart about when you lock. Locking up early might save you money if rates are going up. Some lenders also let you “float down” your loan, which means you may take advantage of rate cuts while the loan is locked.
5. Make your debt-to-income ratio (DTI) better
Lenders look at your debt-to-income ratio, which is the amount of debt you have each month relative to your income, to see if you can get a mortgage and what the rate will be. A lower DTI means you’re less of a risk and may be able to get better rates.
You may improve your DTI and get lower mortgage rates by paying off debts, making more money, or putting down a bigger down payment.
6. Choose a loan term that is shorter
30-year mortgages are popular because they have lower monthly payments, although 15- or 20-year loans usually have lower interest rates. You pay off your house sooner and pay less interest overall since the term is shorter.
A shorter-term mortgage is a great method to save money if you can afford the higher monthly payments.
Last Thoughts
Planning, study, and a little bit of know-how are needed to get the greatest mortgage rate in 2025. You can save a lot of money by knowing your credit score, shopping around, paying points strategically, timing your rate lock, increasing your debt-to-income ratio, and thinking about shorter loan terms. These tips can help you get a good bargain and make your ideal house more economical in the long run.