The lowest mortgage interest rates today generally come from 15-year conventional loans and VA loans for qualified borrowers. However, rates change daily, and the number you see online rarely matches the one you’ll qualify for. Your final rate depends on your credit score, down payment amount, mortgage type, and other factors lenders use to assess borrowers’ risk.
In this article, you'll learn what the lowest rates look like right now, how they compare to historical lows, which loan types offer the best rates, and most importantly, how to position yourself to qualify for the lowest rate possible. You'll also know how lenders actually set rates and when experts expect rates to drop.
Shopping rates with multiple lenders is essential. A slight difference in interest rate could translate to thousands of dollars over the life of your loan.
Today’s lowest mortgage rates
Mortgage rates change constantly, but national averages tend to fall into predictable ranges. Generally speaking, 30-year fixed mortgage rates tend to be higher than 15-year fixed and VA loans.
Here are four mortgages that offer the lowest rates today.
15-year fixed loans
These mortgages almost always offer the cheapest rates. This is because shorter loan terms mean less risk for lenders. Borrowers pay less interest, but monthly payments will be higher.
VA loans
Veterans and active-duty members who qualify for VA loans often secure the lowest rates on the market. Backed by the Department of Veterans Affairs, these loans carry less risk for lenders. That’s why they require no down payment and mortgage insurance.
FHA loans
FHA loans often offer competitive initial rates, especially for borrowers with lower credit scores. However, you’re on the hook for mortgage insurance premiums — potentially over the life of the loan, depending on how much you put down. This will significantly increase the total cost of buying a home.
Adjustable-rate mortgages (ARMs)
ARMs usually offer the lowest introductory rates. But after the initial period (typically 5, 7, or 10 years), rates adjust based on the market.
For this reason, ARMs are ideal for borrowers planning to sell or refinance before the adjustment period begins.
What is the lowest mortgage rate ever recorded?
The lowest mortgage rates in history occurred during the COVID-19 pandemic. In January 2021, the average 30-year fixed mortgage rate hit around 2.65%.[1]
Rates fell to this historic low because the Federal Reserve bought large amounts of mortgage-backed securities to stabilize the markets. In most cases, when the Fed buys bonds, yields drop, and mortgage rates follow suit.
Today's rates are higher than pandemic levels, but market cycles change regularly.
Why your rate won’t match the advertised lowest rate
Even if you search, “What is the lowest interest rate for a mortgage?” and see a lender advertising a competitive rate, your personal rate will vary.
Here’s what determines the rate you get.
Credit score
Your credit score is the biggest deciding factor of your final rate. Borrowers with credit scores of 740 and higher often get the best rates on the market. As scores drop, interest rates tend to be higher.
Down payment/loan-to-value (LTV)
Lower LTV ratios mean lower risks for lenders. A 20% down payment gets a better rate than 3% or 5% down and lets you avoid private mortgage insurance (PMI).
Loan type
Conventional loans, VA loans, FHA loans, and USDA loans all offer different mortgage rates. VA loans typically offer the lowest rates for eligible borrowers. Conventional loans are priced competitively for borrowers with strong credit profiles. FHA loans may show lower initial rates but carry mortgage insurance costs, which can increase the overall borrowing cost.
Loan term
The shorter the loan term, the lower your rates will be. For example: 15-year mortgages typically have lower rates than 30-year mortgages.
Points/lender credits
Points lower your interest rate, but you’ll pay more at closing. Lender credits are the opposite: They reduce your closing costs upfront in exchange for a higher interest rate.
Income stability & DTI ratio
If your income is unstable and you have a high debt-to-income ratio, your rate will likely be higher than for a borrower with stable income and low DTI.
Property type
Primary residences get the best rates, while second homes are slightly higher. Investment properties carry the highest mortgage rates.
Market conditions
Inflation, treasury yields, and Federal Reserve policy all influence the mortgage rate you get.
Note: Even if you see a lender advertising the “lowest rate,” your personal financial and credit profile determines the rate you actually qualify for.
How to get the lowest interest rate for a mortgage
If you want to get the best mortgage rate, here’s what to do.
Improve your credit score
Your credit score is one of the greatest factors lenders use to assess your risk, and having a good score could mean securing better rates. Here are some of the ways to improve your credit score:
- Pay bills on time
- Pay down credit card balances and keep your credit utilization ratio below 10%[2]
- Remove errors from your credit report by disputing inaccuracies with the bureaus
- Avoid opening new credit accounts in the six months before applying
Increase your down payment
The more you put down, the less risky you appear in the eyes of lenders. Aim for a 20% down payment to secure the best mortgage rate and avoid PMI.
Choose the right loan type
If your credit score is not in good shape, FHA loans may be the way to go. VA loans offer competitive rates and terms if you're eligible. Conventional loans provide the most flexibility for borrowers with strong credit profiles.
Consider a shorter loan term
If you can afford the higher payment, 15-year fixed mortgages offer lower rates and massive interest savings.
Buy mortgage points
Buying mortgage points lowers your interest by paying the lender an upfront fee at closing. Each point lowers your interest rate by 0.25% over the life of the loan.
Shop at least 3–5 lenders
This is non-negotiable. Not all lenders offer the same rates, so shopping around is critical.
Use a mortgage broker or comparison platform
Mortgage brokers often have access to wholesale rates not available publicly. Even a rate reduction of 0.25% can save tens of thousands over 30 years.
How lenders determine your mortgage rate
Mortgage rates follow broader economic patterns with individual adjustments for your risk profile.
Rates track U.S. Treasury bond yields and inflation trends. When 10-year Treasury yields rise, mortgage rates typically follow. When inflation goes up, mortgage rates increase to compensate lenders for decreased purchasing power over time.[3]
Lenders then add their margin based on your borrower profile. This risk-based pricing adjusts your rate using credit score, LTV ratio, down payment, loan type, and property type.
When will mortgage rates go down?
It’s nearly impossible to predict when mortgage rates will go down. However, understanding the factors that drive mortgage rates may help.
Mortgage rates respond to three primary factors:
- Inflation: When inflation moderates, rates typically decline. High inflation keeps rates elevated as lenders demand higher returns.
- Federal Reserve decisions: The Fed doesn't set mortgage rates, but its interest rate decisions influence the broader market. When the Fed signals rate cuts, mortgage rates often decline in anticipation.
- Bond markets: Mortgage rates closely track 10-year Treasury yields. When investors buy bonds, yields fall, and mortgage rates drop.
Major forecasters suggest rates may gradually decline if inflation continues moderating. But no forecast is guaranteed. That’s why the best strategy is comparing lenders and locking in your rate when the numbers make sense for your budget.
Ways to reduce your payment even if you can’t get the lowest rate
If today's rates feel high, these strategies can lower your payment.
2-1 buydown
This is a mortgage financing option that lowers your interest rate for the first two years of the mortgage. It reduces your interest rate by 2% for the first year and 1% for the second year.
Adjustable-rate mortgages (ARMs)
If you’re planning to sell or refinance within 5-7 years, ARMs offer lower initial rates than fixed mortgages.
Refinancing
You can lock in today’s rates and refinance later when rates drop. While refinancing means paying closing costs again, a significant drop in rates could mean more savings.
Down payment assistance programs
Many states offer programs that help with down payment and closing costs. Taking advantage of such programs will make your payments more manageable.
Choosing a cheaper property type or location
Sometimes the best move is buying below your maximum approval amount or changing your location.
Real example: Why chasing the lowest rate matters
Let's say you’re taking out a $350,000 mortgage loan. Here’s how much you’ll pay in interest based on different rates.
| Rate | Monthly payment | Total interest over 30 years |
|---|---|---|
| 6.5% | $2,212 | $446,482 |
| 6.0% | $2,098 | $405,434 |
| 5.5% | $1,987 | $365,414 |
How to compare rates and choose the best lender
Shopping for the best rates and lender requires the following.
Compare APR, not just rate
The interest rate shows what you’ll pay to borrow the money, but APR includes the interest rate plus required lender fees. A lender with a low advertised rate but a high APR is actually more expensive.
Compare closing costs
Lenders package fees differently. Make sure you receive Loan Estimates from each lender so you can compare closing costs and other fees.
Ask about points
Mortgage points can lower your interest rate but require money upfront.
Ask how long a rate lock is valid
Rate locks often last between 30 and 90 days. Before choosing a lender, confirm how long the lock lasts, whether they charge for it, and whether you can get a float down if rates decrease before your loan closes.
Compare lender fees
Interest rate is only one part of securing a mortgage. Lenders also charge origination, underwriting, and processing, among other fees.
Look at service quality and preapproval experience
A lender might have the best rate but be slow at processing loans. During preapproval, pay attention to how quickly they respond.
Next steps
The lowest mortgage rate depends on your unique situation. Start by checking your credit score and identifying areas for improvement. Determine how much you can comfortably put down. Then get quotes from at least three lenders, including your bank, a credit union, and an online lender.
When you’re ready to start shopping for a home, a savvy agent can help ensure you get the best value for your money. Get matched with experienced local agents who can refer you to trusted lenders and help you navigate the entire home-buying process.
FAQ
What is the lowest mortgage rate right now?
It varies daily, but the lowest rates usually come from 15-year fixed loans and VA loans.
What loan type has the lowest interest rate?
VA loans offer the lowest rates for eligible borrowers.
What’s the lowest mortgage rate ever?
The lowest mortgage rates ever recorded occurred in January 2021, when 30-year fixed rates averaged approximately 2.65%.
How can I get a lower mortgage rate with bad credit?
Consider FHA loans. But before applying, work on improving your credit score.
Should I wait for mortgage rates to drop?
If you find a home you love at a price you can afford, don't wait for mortgage rates to drop. You can refinance later if rates drop significantly.
Are adjustable-rate mortgages cheaper?
Yes, because they offer lower introductory rates. They're cheaper if you sell or refinance before the adjustment period.