Homebuyers Can Beat the Headline Mortgage Rate by Shopping, Saving and Strengthening Credit

New Realtor.com^® report finds the middle 80% of borrowers received rates spanning 93 basis points—a difference worth roughly $28,400 in buying power

AUSTIN, Texas, Oct. 1, 2026 /PRNewswire/ -- As mortgage rates crossed 7% for the first time since January 2025, reaching a 20-month high, a new Realtor.com^® report finds that the rate in the headlines is only part of the affordability story. Using data from more than 1.35 million purchase loans originated from January 2023 through December 2025, borrowers with the same headline-rate environment can receive meaningfully different mortgage rates based on their financial profile and the choices they make before and during the loan process.

"Mortgage-rate headlines matter, but they are not the whole story," said Jake Krimmel, senior economist at Realtor.com^®. "Our report finds that borrowers' actual rates vary widely even within the same month, and that the gap between a typical outcome and a strong one can translate into tens of thousands of dollars in purchasing power. A buyer's credit profile, down payment and lender choice all help determine where they land within that range."

At a time when elevated mortgage rates are pressuring affordability, this new report points to practical steps buyers can take to improve their outcome:

• Start early on credit: Buyers with lead time can focus on crossing the 700 and 720 score thresholds, where the analysis found the largest rate improvements.
• Look beyond a 20% down payment target: Reaching 20% down can eliminate mortgage insurance, while a 10% down-payment threshold also meaningfully improves pricing for buyers below 20% down.
• Shop broadly: Comparing multiple lender offers can create an immediate opportunity to improve pricing, with the difference between a typical and a very competitive retail lender worth about 19 basis points in this analysis.
• Compare total costs: Rate is only one component of affordability. Buyers should assess mortgage insurance, closing costs and any discount points alongside the interest rate.

Rates Vary Well Beyond the Headline Rate

If the median borrower received a 7% rate, half of borrowers would land between 6.73% and 7.21%, a 48-basis-point range. The middle 80% would receive rates between 6.50% and 7.43%, a 93-basis-point spread worth about $28,400 of home price on a $2,000 monthly principal-and-interest budget. That range across borrowers in a single month is slightly wider than the typical range of headline-rate movement across most three-month periods.

Credit Score Thresholds Offer the Biggest Rate Gains

Credit score had the largest independent effect on borrower rates, although it can take time to improve. Across borrowers from 2023 through 2025, crossing the 700 and 720 credit-score thresholds lowered rates by about 5.5 basis points each, while moving from the 680s to 720 was worth about 11 basis points—or roughly $3,200 of additional home price on a $2,000 monthly principal-and-interest budget. The full climb from below 640 to 780-plus was associated with a 32-basis-point improvement, worth roughly $10,100 in home price.

"Buyers who have time before they plan to purchase should focus on the credit-score thresholds that matter most, especially 700 and 720," Krimmel said. "Improving a score can take planning, but even a move from the high 600s to 720 can improve the rate a buyer is likely to receive and expand the home budget available to them."

Down Payment Strategy Matters Beyond the Rate

Down payment choices affect rates, but not always in the way buyers expect. Reaching exactly 20% down from 15% to 19% down lowered the mortgage rate by only about 0.7 basis points. The larger financial benefit at that threshold is eliminating mortgage insurance, underscoring that buyers should consider total monthly housing costs rather than rate alone.

For buyers putting down less than 20%, moving from 5%–9% down to 10%–14% lowered rates by 5.5 basis points, the largest single step below the 20% threshold. Above 20%, rate improvements continued through roughly 35% down, with the total difference between 20% and 40%-plus down amounting to 17.5 basis points, or about $5,400 of home price on a $2,000 monthly principal-and-interest budget.

"Twenty percent down is still an important financial benchmark because it ends mortgage insurance, but buyers should not assume it produces a large rate drop on its own," Krimmel said. "The right target depends on the buyer's full financial picture: how much cash they need to preserve after closing, the monthly cost of mortgage insurance and the rate benefit from additional money down."

Shopping Lenders is the Fastest Lever Buyers Can Pull

Among the factors studied, lender shopping offered the most immediate opportunity to improve a borrower's rate. In 2025, mortgage brokers and correspondent lenders generally priced about 5 to 6 basis points below retail lenders after accounting for borrower characteristics, timing and location. More importantly, borrowers who shopped across retail lenders could find a substantial spread: a very competitive retail lender beat the Freddie Mac headline rate by about 17 basis points, while a typical retail lender came in about 2 basis points above it. The difference between a typical retail lender and a very competitive one was approximately 19 basis points, worth about $5,800 in buying power on a $2,000 monthly principal-and-interest budget.

"For buyers who are ready to move now, comparison shopping is the clearest opportunity," Krimmel said. "A strong lender offer can be worth roughly twice as much as moving from a 690 to a 720 credit score, and it is available immediately for buyers who are able to search. Buyers should seek multiple loan estimates, compare the full terms—not just the advertised rate—and give themselves enough time to choose the lender that best fits their needs."

Methodology

This analysis draws on Freddie Mac's Single-Family Loan-Level Dataset, which reports characteristics for every mortgage Freddie Mac acquires, covering 1,351,302 purchase loans originated between January 2023 and December 2025. The sample includes 30-year fixed-rate loans on owner-occupied single-family homes, planned unit developments and condos, which together are 98.5% of purchase originations. For each loan we measure the rate the borrower actually received against Freddie Mac's Primary Mortgage Market Survey rate, the weekly average that gets reported as the mortgage rate, over the month when that borrower most likely locked. The dataset does not report the origination date, so we impute that using the data. The imputation puts about 60% of the weight on the month before closing and 40% on the closing month, which is the standard 30-to-45-day rate lock. Where we report what a single characteristic is worth, we are comparing borrowers who differ on that one thing and are otherwise alike, holding constant credit score, down payment, debt-to-income, loan size, first-time buyer status, affordable-program use, property type, origination channel, the lender, the quarter and the metro area.

Three data/methodological caveats: First, the loan data does not disclose discount points, so a borrower who paid cash up front to buy their rate down looks here like someone who simply got a better rate. Every spread we report should be read as including that choice. Second, these are loans that were applied for, approved and acquired by Freddie Mac. As a result, FHA, VA, jumbo and portfolio lending is excluded. Finally, the data names the firm that sold each loan to Freddie Mac, which is the originator only for retail lending, so our comparisons across individual lenders are for retail originators only.

About Realtor.com^®

For over 30 years, Realtor.com^® has connected buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 real estate site REALTOR® agents recommend, Realtor.com® delivers consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media Contact: Mallory Micetich, [email protected] 

SOURCE Realtor.com