Mortgage rates were high when I bought my house in 2025. It wasn’t my first time shopping for a mortgage, though it was my first time doing so with nearly 10 years of personal finance writing experience. I knew rates weren’t ideal, but the timing was right for my family and finances.
Rather than waiting for better rates while home prices kept climbing, I focused on my borrower profile, loan term and compared lender offers. I chose a 15-year mortgage, negotiated loan offers and picked a lender with competitive terms and a low-cost rate modification that I can use if rates drop.
[Read: Best Mortgage Lenders]
How to Lower Your Mortgage Rate: Focusing on What You Can Control
When I bought my house, Freddie Mac’s weekly mortgage data showed 30-year fixed rates around 6.9% and 15-year fixed rates closer to 6% — compared with slightly lower rates of around 6.4% for 30-year loans and 5.7% for 15-year loans today. My mortgage rate came in at 5.75%, which wasn’t a pandemic-era bargain but was competitive for the market I bought in.
I couldn’t control the rate environment, so I shifted attention to the six factors I could influence in my mortgage application:
— Purchase price
— Credit score
— Debt
— Down payment
— Loan term
— Lender choice
I applied for a mortgage with 20% down, excellent credit and little overall debt aside from a car payment and credit cards I pay off each month.
I chose a home that was well within my budget and aggressively negotiated the price. That helped keep my debt-to-income ratio down and improved the loan-to-value ratio because the appraisal came in over the purchase price.
“You don’t get a vote on what the market is doing, but your credit, your debt, how much you put down, who you borrow from, what fees you agree to, all of that is on you,” says Mike Garrett, founder and senior loan advisor with Strategic Mortgage Advisors in Powder Springs, Georgia. “I’ve had borrowers sit around waiting for rates to drop when they could’ve spent that same time paying down a credit card and picking up a better offer. Work on your file. That’s where the money is.”
15-Year vs. 30-Year Mortgage: Is a Shorter Loan Term Worth It?
One way I got a lower mortgage rate was by opting for a 15-year mortgage instead of a 30-year loan. Rates were significantly lower for 15-year mortgages than 30-year mortgages when I bought my house, and I’ll pay less interest overall with a shorter loan term.
Before I shopped for homes, I considered the monthly payment amount I was comfortable with on a 15-year mortgage and used that to set my homebuying budget. A 15-year mortgage isn’t always the best choice if it stretches your budget or leaves too little room for savings, emergencies or home repairs.
“The rate is usually lower, and you’re knocking down principal hard from month one, which is huge when rates are elevated,” says Garrett. “But you’re locked into that payment.”
If you’re nervous about a higher payment, you can get a 30-year loan and make extra payments. That gives you more monthly flexibility while paying the loan down faster when you have room in your budget.
[See: Best Mortgage Lenders for First-Time Homebuyers]
How to Compare Loan Estimates and Negotiate Lender Fees
I didn’t accept the first mortgage quote I received. I compared multiple lender offers and narrowed my options down to the two with the best rates and fees — a local credit union and the lender my real estate agent recommended. I made sure I wasn’t leaving any savings on the table and asked the lenders whether they could adjust their offers to help me choose between them.
The lenders matched rates after I asked, but one had higher fees than the other. That made my decision easy.
The lowest advertised rate isn’t always the lowest-cost loan, because a lender may have a lower rate but higher origination fees, discount points or closing costs. Or another may have a higher rate but lower up-front costs or more flexible loan features.
“Make sure you are obtaining an actual loan estimate from each lender so that you can compare the quotes side by side,” says Matthew Locke, national mortgage sales manager at UMB Bank in Kansas City, Missouri. “In some cases, lenders may quote a lower interest rate but increase the fees or points substantially, making it difficult for the consumer to compare quotes from different lenders.”
Mortgage Rate Modification vs. Refinance: A Hidden Cost-Saving Feature
The lender I chose had the best rate and fees, but what sealed the deal was a low-cost rate modification option. If rates drop during my loan term, the loan modification gives me the flexibility to lower my rate.
Instead of doing a full refinance, I can request a lower rate during the loan term for a $500 fee, as long as I reduce the term of the loan by at least a year. I haven’t used that option yet because my rate is still lower than my lender’s currently advertised 15-year rate, but I’ll keep watching to modify my loan when the time is right.
The rate modification option wasn’t made clear to me until I started asking questions about terms. It’s worth asking lenders about features that offer flexibility beyond the initial rate.
“Once you get past the data, you should really understand all the features and restrictions of your loan,” says Michelle White, national mortgage expert at The CE Shop, an online educational institution for real estate professionals in Denver. She advises asking about prepayment penalties, whether you can make biweekly payments and if a loan modification is available if the rate goes down.
[Read: Best Mortgage Refinance Lenders.]
Checklist: How Homebuyers Can Shop for a Mortgage While Rates Are High
When navigating the housing market during a time of elevated mortgage rates, maximize your savings by following these guidelines:
— Check your credit. The biggest lever buyers can have is their creditworthiness. Check your credit reports, pay down revolving debt if possible and avoid taking on new debt. Lenders price for risk, and you can become a more attractive borrower with a stronger credit profile, lower DTI and larger down payment.
— Tally the true cost. When you shop for a mortgage, look first at the interest rate, but don’t stop there. Get loan estimates from multiple lenders to compare the rate, points, lender fees, closing costs and lender credits. A lower rate may not be the best deal. Always look at the bottom line and your monthly payment.
— Widen your lender search. Consider lenders beyond big banks, including credit unions, local lenders and mortgage brokers, which may offer lower fees or flexible features that matter over time.
— Ask lenders about rate drop features. “Some lenders will let you reset your rate later for a few hundred bucks if the market drops, which is a whole lot easier and cheaper than a full refi,” says Garrett. “Ask the question and get the answer in writing before you close.”
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I’m a Personal Finance Writer: Here’s How I Beat High Mortgage Rates When Buying My House originally appeared on usnews.com
