US Mortgage Rates Near 7%: 8 Ways Homebuyers Can Secure a Cheaper Deal

US mortgage rates have risen above 7%, increasing borrowing costs for homebuyers already facing high property prices. Although buyers cannot control market-wide interest rates, they can explore ways to secure more favourable loan terms and manage their long-term costs.

Freddie Mac reported that the average 30-year fixed mortgage rate was 7.40% on 15 October 2026, unchanged from the previous week. The 15-year fixed rate stood at 6.71%. A year earlier, the respective rates were 6.27% and 5.52%. From reviewing lender offers to negotiating seller assistance, the following strategies can help buyers make informed mortgage decisions.

1. Compare Multiple Mortgage Lenders

Request written loan estimates from several lenders before committing to a mortgage. Compare interest rates, annual percentage rates (APRs), lender fees, and upfront charges to understand the full cost of each offer.

APR includes the interest rate and certain borrowing costs, making it useful when evaluating loans with similar terms. Mortgage pre-approval can also help establish your borrowing capacity, although it does not guarantee a final rate or loan approval.

2. Strengthen Your Credit Score

Credit scores influence mortgage eligibility and the interest rates lenders may offer. Before applying, review your credit reports for errors, pay bills on time, and reduce outstanding credit card balances where possible. Avoid opening unnecessary credit accounts or taking on new debt shortly before applying. The potential benefit depends on your existing credit profile, the lender's criteria and the mortgage programme.

3. Lower Your Debt-to-Income Ratio

Your debt-to-income (DTI) ratio measures recurring monthly debt payments against gross monthly income. Lenders use it to assess whether you can manage additional borrowing. Paying down existing loans and avoiding new monthly commitments can improve this ratio. However, acceptable DTI levels vary between lenders and loan programmes, and a lower ratio does not automatically secure a lower interest rate.

4. Consider a Larger Down Payment

A larger down payment reduces the amount you need to borrow and may help you qualify for more favourable loan terms. Depending on the mortgage programme, it can also reduce mortgage insurance costs.

Some US mortgage programmes permit down payments as low as 3%, although eligibility requirements apply. Before committing additional cash, keep enough savings available for emergencies, moving expenses, and future home repairs.

5. Calculate the Cost of Mortgage Discount Points

Mortgage discount points allow borrowers to pay an upfront fee in exchange for a potentially lower interest rate. One point typically costs 1% of the loan amount, equivalent to $3,000 on a $300,000 mortgage.

The rate reduction varies by lender and market conditions. Divide the upfront cost by the expected monthly savings to calculate the break-even period. For example, if points cost $3,000 and save $75 per month, you would need 40 months to recover the expense. Selling or refinancing before that point could mean missing out on the expected savings.

6. Negotiate Seller Concessions or a Rate Buydown

Homebuyers may be able to negotiate seller contributions towards eligible closing costs or a mortgage-rate buydown. Redfin's May 2026 housing-market analysis reported that 46.2% of home sales involved seller concessions.

A temporary buydown reduces payments during an initial period, after which payments increase according to the loan's permanent terms. Buyers should check programme restrictions and determine whether seller assistance offers greater value than a lower purchase price. Seller concessions are not guaranteed, so their availability depends on the seller, the property, and local market conditions.

7. Compare Adjustable-Rate and Shorter-Term Mortgages

An adjustable-rate mortgage (ARM) has an initial interest rate that may change after a specified period. Although some ARMs offer an attractive starting rate, this is not guaranteed. Review the introductory period, adjustment schedule, rate caps, and maximum possible payments before choosing this option. Consider whether your budget could withstand higher payments if interest rates rise. A 15- or 20-year fixed mortgage may offer a lower interest rate than a 30-year loan. However, the shorter repayment period generally results in higher monthly payments, even though the borrower may pay less total interest over the life of the loan.

8. Investigate Assumable Mortgages

An assumable mortgage allows an eligible buyer to take over a seller's existing home loan, potentially retaining its lower interest rate. Certain Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and US Department of Agriculture (USDA) loans may qualify, subject to programme rules. Most conventional mortgages are not assumable.

The main challenge is covering the difference between the outstanding mortgage balance and the home's purchase price. Buyers may need substantial savings or additional financing to bridge this gap. Buyers must also obtain lender approval and meet the applicable eligibility conditions.

Choosing the Right Mortgage Strategy

The right mortgage depends on your budget, financial circumstances, and expected ownership period. Compare total borrowing costs, upfront expenses, and potential payment changes before committing to a loan.