Mortgage rates are dropping, and savvy homebuyers and refinancers have a chance to save big. While the average rate is 6.13% as of late 2025, you don’t have to settle for that. With the right strategy, you could secure a rate in the high 5% range or lower.
Here’s how to make it happen.
1️⃣ Buy Mortgage Points — Pay Upfront, Save Every Month
Mortgage points are essentially a fee you pay a lender to reduce your interest rate.
- Typical savings: 0.25% to 0.50% lower than the listed rate.
- Example: A 6.13% average rate could drop to 5.88% or even 5.63%.
- How to pay: Roll the points into your loan or pay at closing.
💡 Pro tip: Even a small drop in your rate can save thousands over the life of a 30-year mortgage. Use online calculators to see exactly how much you’d save before paying upfront.
2️⃣ Consider an Adjustable-Rate Mortgage (ARM)
An ARM often comes with a lower initial rate compared to a fixed-rate mortgage.
- Current offers: High 5% range with 5, 7, or 10-year fixed periods.
- The catch: After the fixed period, the rate adjusts based on the market.
- Flexibility: You can refinance into a fixed-rate mortgage later if rates climb.
💡 Pro tip: If you plan to stay in your home 5–10 years, an ARM can be a smart way to lock in a lower rate now.
3️⃣ Make a Larger Down Payment
Putting down more than 20% can give lenders confidence and help you secure a better rate.
- Benefits:
- Lower loan-to-value (LTV) ratio
- Smaller monthly payments
- Possibly avoid private mortgage insurance (PMI)
- Example: If you can afford 25–30% down, your lender may reward you with a lower rate than standard 20% down payments.
💡 Pro tip: Even if it stretches your savings a bit, the long-term interest savings often outweigh the short-term cash outlay.
✅ Bonus Tips to Lower Your Mortgage Rate
- Boost your credit score: Higher scores = better rates.
- Shop around: Different lenders have different rates and fees.
- Lock your rate: Once you find a favorable rate, locking it in can protect you from daily market swings.
Bottom Line
Mortgage rates may not be at the 4% highs of the past, but the current climate offers an opportunity to secure rates under 6% — sometimes with just a few strategic moves. Whether it’s paying for points, considering an ARM, or making a bigger down payment, acting now can save you thousands over the life of your loan.
⏳ Pro tip: Rates change daily. If you’re close to your target, don’t wait — now is the time to lock in a deal. Call or text us now +13478316085