Mortgage Rates Dip: How to Secure the Best Deal as 30-year Fixed Approaches One-Year Low
As mortgage rates edge closer to a one-year low, prospective homebuyers have a renewed possibility to secure more affordable financing. However, navigating the mortgage landscape requires strategic planning. Experts outline key steps borrowers can take to obtain the most favorable rates, from increasing down payments to exploring adjustable-rate mortgages.
Down Payment Impact
A larger down payment can significantly improve your chances of landing a lower mortgage rate.According to Lindner, lenders often reward borrowers who demonstrate a greater financial commitment upfront. Yun confirms that a 20% down payment “would definitely get a lower mortgage rate,” as it signifies “more skin in the game” and reduces lender risk.
While 20% down isn’t always feasible, the average down payment in 2024 was 18% for all buyers and 9% for first-time homebuyers, according to the National Association of Realtors. Schulz emphasizes the potential savings: a 20% down payment can save “tens of thousands of dollars in interest” over the loan’s life and eliminate the need for private mortgage insurance, resulting in “thousands of dollars a year” in savings.
Beyond the 30-Year Fixed
Borrowers shouldn’t limit themselves to the conventional 30-year fixed mortgage. Lindner suggests considering adjustable-rate mortgages (ARMs), which currently offer lower initial rates. An ARM could reduce your rate by as much as half a percentage point. As of September 9, 2025, a 7/6 ARM rate stood at 5.59%, according to Mortgage News Daily.
Yun notes that while 90% of consumers opt for a 30-year fixed, ARMs can be a viable entry point into the market, notably for younger buyers anticipating a move within a shorter timeframe. Though, he cautions that arms carry the risk of higher interest rates in the future.
