8 tips for getting the lowest mortgage rates in 2026

Core Insights - Mortgage rates have remained stable since the Federal Reserve's rate cut in December, but strategic actions can help secure rates below the national average [1] Group 1: Mortgage Rate Analysis - Analysis of nearly 5,000 mortgage lenders indicates that the lowest rates in 2024 are offered by large national banks, credit unions, and homebuilders financing their own construction [2] - The lowest mortgage rates require research into personal financial metrics such as credit score, debt-to-income ratio, and down payment amount [3] Group 2: Strategies for Securing Low Mortgage Rates - Improving credit scores can lead to significant savings on mortgage rates, with a score increase from 620 to 640 potentially lowering the APR from 7.30% to 7.11% [5][6] - Aiming for a debt-to-income (DTI) ratio of 25% or less is crucial for obtaining lower mortgage rates, as lenders prefer DTIs of 35% or less [7][8] - Making a larger down payment can also help secure a lower mortgage rate, with the median down payment for first-time buyers being 9% in 2024 [10] Group 3: Additional Rate Reduction Techniques - Buying discount points can reduce ongoing mortgage rates, with one point typically lowering the rate by a quarter of a percentage point [11] - Negotiating an interest rate buydown can temporarily lower mortgage rates, although this option is rare among lenders [16] - Adjustable-rate mortgages (ARMs) are becoming popular again, offering lower initial rates but requiring careful consideration of future rate changes [19] Group 4: Market Trends and Homeowner Insights - Approximately 45% of home buyers in 2024 secured mortgage rates below 5%, despite prevailing rates above 6.5% [14] - A significant portion of existing homeowners (71.3%) have mortgage rates below 5%, indicating limited refinancing opportunities currently [23] - The lowest recorded mortgage rate was 2.65% in January 2021, highlighting the volatility and cyclical nature of mortgage rates [28]