8 strategies for getting the lowest mortgage rates in 2026

Core Insights - Mortgage rates ended 2025 at their annual lows, presenting opportunities for borrowers to secure rates below the national average in 2026 [1] - Analysis of nearly 5,000 mortgage lenders revealed that the largest national banks, credit unions, and homebuilders offered the most favorable home loan rates in 2024 [2] Group 1: Strategies for Securing Low Mortgage Rates - Improving credit scores can lead to significant savings on mortgage rates, with a FICO Score increase from 620 to 640 potentially lowering the APR from 7.26% to 7.09% [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 2: Additional Techniques for Rate Reduction - Buying discount points can reduce ongoing mortgage rates, with one point typically lowering the interest rate by a quarter of a percentage point [11] - Interest rate buydowns, often offered by home builders or sellers, can temporarily lower mortgage rates, although they may lead to higher payments in the long term [16][17] - Adjustable-rate mortgages (ARMs) can be beneficial, especially when rates rise, as they often start with lower introductory rates [19] Group 3: Market Context and Trends - Approximately 45% of home buyers obtained mortgage rates below 5% in 2024, despite prevailing rates being above 6.5% [14] - Current mortgage rates for many homeowners are in the low-to-mid-6% range, with a significant portion of existing homeowners having rates below 5% [23] - The lowest recorded mortgage rate was 2.65% in January 2021, highlighting the cyclical nature of mortgage rates [28]