Skip to Main Content

How to get the best mortgage rate

December 04, 2023 | 5 min read

In this article

  • Before you borrow, research different loan term times and strategies to improve your credit score to save on interest.
  • Remember to always borrow responsibly and less than you qualify for when buying a home.
  • Reduce mortgage costs by saving more for a bigger down payment, researching lender incentives and discount points.

When shopping for a mortgage, one of the most important features to consider is the interest rate on the loan. A few percentage points on a loan you’ll be paying back for the next 15 or 30 years can make a difference of thousands of dollars over the life of the loan. If you’re in the market for a mortgage or you plan on buying a home sometime in the future, these tips can help navigate getting a better mortgage rate.

1. Maximize your credit score

The best way to get a low interest rate on a home loan is to improve your credit score. In the months leading up to your mortgage application, concentrate on boosting that magic three-digit number by using your credit cards responsibly. This means paying every credit card bill on time, not opening new credit card accounts, regularly checking your credit report for errors and keeping your credit utilization under 30%. You’ll also want to make serious progress toward paying down excessive credit card debt if it’s hindering your ability to save.

2. Save a bigger down payment

The more money you put down on your new home, the greater your chances are of obtaining a lower mortgage rate. While lenders may accept lower down payments, a down payment equal to 20% of the home’s total value may position you as a responsible borrower and net you a lower rate as a result. Putting 20% down also means you’ll avoid paying PMI (Private Mortgage Insurance), which tacks an additional cost onto your monthly mortgage payments.

3. Borrow less than you qualify for

As tempting as it is to borrow as much as possible, be mindful of how that might affect your interest rate and the overall cost of the loan. Having a higher debt-to-income ratio can negatively affect your rate and other home costs, especially if mortgage insurance is required.

4. Choose a shorter-term loan

Most people think of mortgages as a 30-year loan, but a 15- or 20-year mortgage can actually be a better choice for many homebuyers. A mortgage with a shorter term nearly always has a lower rate than a 30-year mortgage from the same lender. The monthly payments will be significantly higher when compared to a 30-year mortgage, but the overall interest paid on the loan will be significantly lower. As a bonus, you’ll build equity in the home faster and own your house free and clear in half the time! 

If you already own a home, you may want to consider refinancing to a 15-year mortgage. You’ll pay off your loan sooner and, with a lower interest rate, you may not see much of a difference in your monthly payments.

5. See what additional fees or incentives your lender can offer

Before closing on a mortgage, it’s important to understand all the fees and related costs you’ll need to pay beyond the down payment; for example, closing costs and title fees. Be sure you can afford these additional costs before signing on the dotted line. 

It’s also a good idea to ask about any incentives your lender offers that can help bring down your mortgage rate. Most lenders give borrowers the opportunity to purchase discount points, which allow the borrower to lower their mortgage rate by a fraction of a percent for each point purchased. Points are priced typically at 1% of the loan amount, or $1,000 for every $100,000 you borrow. 

Inquire about other incentives your lender may offer as well, such as  first-time homebuyer programs  or assistance with fees. For example, Desert Financial offers up to  $5,000 toward closing costs1  if you use a participating real estate broker. 

When you’re shopping for a new home, it’s easy to get wrapped up in choosing the perfect pad. But you also want to make sure that you choose the right mortgage for your needs. Obtaining approval for a mortgage with a low interest rate means saving on interest payments for years to come. If you follow the steps outlined above, you’ll be much closer to scoring a mortgage with the best possible rate! 

Related content

Subscribe to our blog

Fill out the form below to sign up for our blog.


Real Estate Broker Program: Members participating in this program will be matched with a participating real estate broker (“Participating Broker”) who will assist in the homebuying experience and will provide the applicable credit toward closing costs. Participating Broker shall provide a credit of 25% of the buyer’s agent commission toward the closing costs, up to a maximum of seven thousand five hundred dollars ($7,500) to be provided regardless of the lender utilized, and a credit of 25% toward the listing agent commission expense, up to a maximum of seven thousand five hundred dollars ($7,500), if the Participating Broker lists an applicable property with a real estate agent from the list of preferred providers. The Participating Broker will confirm each applicable credit is applied by the title company. These credits are applied as a discount from the commission payable to the broker. Use of a Participating Broker is completely voluntary and members financing the purchase of a home with Desert Financial Credit Union (“Desert Financial”) are under no obligation to participate in this Program. Desert Financial does not receive any benefit, monetary or otherwise, from the Participating Broker under this Program. Participating brokers are non-affiliated third parties of Desert Financial, and Desert Financial makes no warranties or representations about the services provided by participating brokers.

The material presented here is for educational purposes only and is not intended to be used as financial, investment or legal advice.

Leaving our website

By clicking Continue you will leave the Desert Financial website and will be directed to an external website operated by a third party.


Desert Financial does not endorse and is not responsible for the content, links, accessibility, or security of any external website. The privacy and security policies of Desert Financial do not apply to the linked website. We encourage you to review these policies upon visiting the linked site to see how they apply to you.