Mortgage rates change daily, and the best rate for you depends on your credit score, down payment, and the lender you choose

There is no single bank with the best mortgage rates for everyone. The rate you receive depends on what you bring to the table: your credit history, how much money you have saved for a down payment, the type of property you are buying, and how long you plan to stay in it. A rate that is excellent for someone with a 750 credit score and 20 percent down will not be the same as the rate offered to someone with a 620 score and 5 percent down.

Rates also shift constantly. A bank advertising 6.5 percent today might quote you 6.8 percent next week, or offer you 6.2 percent if you lock in when ready. The only way to know what you will actually be offered is to get quotes from multiple lenders and compare them side by side, using the same loan details for each one.

Key Takeaways

  • The mortgage rate you receive depends on your credit score, down payment size, loan type, and current market conditions — not just which bank you choose.
  • Large national banks, credit unions, and online lenders often have different rate structures, so comparing at least three lenders is necessary to see what you may have access to for.
  • When you request quotes, provide identical information to each lender so you can compare apples to apples: same loan amount, same down payment percentage, same loan term.
  • Rates lock in only when you formally request a rate lock, which typically lasts 30 to 60 days while your loan processes.
  • The lowest advertised rate is not always the best deal if closing costs are high, so compare the total cost of the loan, not just the interest rate.

Where mortgage rates come from and why they differ between lenders

Banks do not set mortgage rates independently. The broader market — driven by the Federal Reserve's decisions, inflation, and bond markets — sets a baseline. Individual lenders then add their own margin on top of that baseline, depending on how much they want to lend and how much risk they are willing to take.

A large national bank like Chase or Bank of America may offer different rates than a local credit union or an online lender like Better.com or Rocket Mortgage, even on the same day. National banks often have higher overhead costs, which can mean higher rates. Credit unions sometimes offer lower rates to their members because they are nonprofit. Online lenders may have lower rates because they have fewer physical branches to maintain.

Your personal profile also changes the rate you see. If you have a credit score above 740, a 20 percent down payment, and a stable income, you are a lower-risk borrower, and lenders will compete harder for your business with lower rates. If your credit score is 620 or your down payment is 3 percent, lenders see more risk and charge a higher rate to offset it.

How to gather real quotes and compare them fairly

Start by contacting at least three different types of lenders: a large national bank, a credit union (if you are a member or can join one), and one online lender. When you request a quote, be prepared to provide the same information to each one: the home price, your down payment amount in dollars, your credit score range, your desired loan term (15 years or 30 years), and the property type (single-family home, condo, investment property).

Ask each lender for a Loan Estimate, which is a standardized form that shows the interest rate, the annual percentage rate (APR), the monthly payment, and all closing costs. The interest rate is what you pay to borrow the money. The APR includes the interest rate plus other costs, so it gives you a fuller picture of what the loan actually costs. Closing costs are the fees the lender and third parties charge to process and close the loan — these typically range from 2 to 5 percent of the loan amount, but vary by lender and location.

Once you have three Loan Estimates in hand, compare the APR and the total closing costs, not just the interest rate. A lender with a 6.2 percent rate but $8,000 in closing costs may cost you more over time than a lender with a 6.4 percent rate and $4,500 in closing costs. The Loan Estimate shows you the monthly payment, so you can see the real difference in your pocket.

Credit unions and online lenders often have different advantages

Credit unions are member-owned financial institutions that sometimes offer lower mortgage rates than national banks, especially if you have been a member for a while and have a good relationship with them. However, not everyone can join a credit union — membership is usually limited to people who work in a certain industry, live in a certain area, or are related to a current member. If you are a member or can join one, it is worth getting a quote.

Online lenders like Better.com, Rocket Mortgage, LendingTree, and may provide Rate operate entirely or mostly online, which means lower overhead costs. They often have competitive rates and can move quickly. The trade-off is that you handle most of the process yourself through a website or app, rather than meeting with a loan officer in person. If you are comfortable with that, online lenders are worth comparing.

National banks like Chase, Bank of America, Wells Fargo, and Citibank have the advantage of physical branches where you can meet someone face-to-face, and they often have existing relationships with customers who bank with them. They may offer a small rate discount if you have a checking account with them, though the discount is usually small — a quarter percent or less.

What a rate lock means and when to use it

Once you have chosen a lender and are ready to move forward, you can request a rate lock. This means the lender promises to hold that interest rate for you for a set period, usually 30, 45, or 60 days. During that time, even if market rates rise, your rate stays the same. If rates fall, you are locked in at the higher rate, so a rate lock is a bet that rates will not drop significantly before your loan closes.

You do not have to lock in when ready when you get a quote. Many people lock in once they have made an offer on a home and it has been accepted, because at that point they know the loan will actually close. Locking in too early — weeks before you have an accepted offer — means paying for a longer lock period and risking that your rate expires before closing.

Ask your lender how long the lock period lasts and whether there is a fee to extend it if your closing is delayed. Some lenders include a free extension; others charge a fee per day or per week.

Factors that affect the rate you are offered

Your credit score is one of the biggest factors. Lenders typically offer their best rates to borrowers with scores of 740 or higher. For every 20-point drop below that, the rate usually increases. If your score is below 620, many lenders will not work with you at all, or will charge significantly higher rates.

Your down payment size matters too. A 20 percent down payment is considered standard and usually qualifies you for the best rates. If you put down less — say, 5 or 10 percent — lenders charge a higher rate because you are borrowing more relative to the home's value. If you put down more than 20 percent, you may see a slightly lower rate, though the difference is often small.

The loan term also affects your rate. A 15-year mortgage typically has a lower interest rate than a 30-year mortgage, because the lender gets their money back faster and takes on less long-term risk. However, your monthly payment will be higher on a 15-year loan. A 30-year loan spreads the payments over more months, so each payment is smaller, but you pay more interest overall.

Your debt-to-income ratio — how much you owe each month compared to how much you earn — influences whether a lender will work with you and what rate they offer. If you have high credit card balances or car loans, that can push your ratio up and result in a higher rate or a smaller loan amount.

When to shop for rates and how often to compare

You can shop for rates at any time, but the best time is when you are seriously considering buying a home — after you have saved for a down payment and checked your credit score. Shopping too early (more than a few months before you plan to buy) means the quotes will be outdated by the time you are ready to move forward.

When you do shop, gather all your quotes within a short window — ideally a few days. Rates change daily, so quotes from different days are not directly comparable. Multiple inquiries from different lenders within 14 days typically count as a single inquiry on your credit report, so shopping around does not significantly damage your credit score.

Once you have locked in a rate with a lender, you do not need to keep shopping. Your rate is protected for the lock period. If you have not locked in yet and rates drop, you can ask your lender to lower your rate before you lock, though they are not required to do so.

Frequently Asked Questions

Do I need to use the bank where I have my checking account?

No. You can get a mortgage from any lender, regardless of where you bank. Some banks offer a small rate discount to existing customers, but it is usually a quarter percent or less. You should compare rates from multiple lenders and choose based on the best overall deal, not convenience.

What is the difference between a fixed rate and an adjustable rate mortgage?

A fixed-rate mortgage keeps the same interest rate for the entire loan — 15 years, 30 years, or whatever term you choose. An adjustable-rate mortgage (ARM) starts with a lower rate for a set period (often 3, 5, 7, or 10 years), then adjusts up or down based on market conditions. ARMs are riskier because your payment can increase significantly after the initial period. Most first-time buyers choose fixed-rate mortgages.

Can I negotiate my mortgage rate?

You cannot negotiate the rate itself, because it is set by market conditions and your personal profile. However, you can negotiate closing costs or ask the lender to cover some of them. You can also shop around to find the lender offering the best rate for your situation, which is the most effective way to get a lower rate.

What happens if rates drop after I lock in?

Once your rate is locked, you are committed to that rate. If rates drop, you cannot take advantage of the lower rate unless you refinance later, which involves paying closing costs again. Some lenders offer a "float down" option that lets you lock in a lower rate if rates drop during your lock period, but this usually costs extra.

How long does it take to close on a mortgage?

Most mortgages close in 30 to 45 days from the time you have an accepted offer on a home. This is why rate locks typically last 30 to 60 days — to give the lender time to process your loan and close before the lock expires. If your closing is delayed, you may need to extend your lock, which may cost a fee.