Mortgage Rates Dip: How โคto Secure the Bestโ Deal as 30-year โขFixed Approaches One-Year Low
As mortgageโ rates edge closer to a one-year low, prospective homebuyers have a renewed possibility toโฃ secure more affordable financing. However, navigating the mortgage landscape requires strategic planning. Experts outline key steps borrowers can take toโฃ obtain the most favorable rates, from increasing down paymentsโ to exploring adjustable-rate mortgages.
Down โฃPayment Impact
A larger down payment โcan 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 thatโข a โ20% โคdown 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 2024โฃ was 18% forโ all buyers and 9% for first-time homebuyers, according to the National Association of Realtors. โSchulz emphasizes the potential savings: a 20% down payment can save “tens of thousands of โฃdollars in โขinterest” over the loan’s life and eliminate the need for private mortgage insurance, resulting in “thousands ofโฃ dollars a year” in savings.
Beyond the 30-Year โขFixed
Borrowers shouldn’t limit themselvesโ to the conventional 30-year fixedโค mortgage. Lindner suggests considering adjustable-rate mortgages (ARMs), which currently offer lower โinitial rates. An ARM could reduce your rate by as much as halfโ a percentage point. As of Septemberโ 9, 2025, a 7/6 ARM rate stood at 5.59%, according to โขMortgage News Daily.
Yun notes that while 90% of consumers optโค for a 30-year fixed, ARMs can be a viable entry point โinto the market, notablyโ for younger buyers anticipating a move within a shorter timeframe. Though, he cautions thatโ arms โขcarryโ the risk of higher interest rates in the future.
