How to Shop for Mortgage Rates (And Actually Save Thousands)

Buying a home is the biggest financial move most Americans will ever make. Yet too many people treat mortgage shopping like they’re picking out a pair of shoes—glancing at the first option that looks good and calling it a day. That mistake can cost tens of thousands of dollars over the life of a loan.

Here’s the truth: mortgage rates aren’t one-size-fits-all. They vary based on credit profile, loan type, down payment, lender margins, and even timing within the market. And if you only get a quote from the lender your realtor recommends or the one a family member used, you’re almost guaranteed to leave money on the table. The Consumer Financial Protection Bureau found that nearly half of borrowers do not shop for a mortgage at all, and those who fail to compare quotes often pay significantly higher rates and fees. That’s why understanding how to shop for mortgage rates is more than smart—it’s essential. In this guide, we’ll break down how rates are set, why they fluctuate, and the strategies that can put you in the best position to secure a deal that aligns with your goals.

Why Mortgage Rate Shopping Matters More Than Ever

The spread between the best-available rate and the worst can easily top 1%. On a $400,000 mortgage, that’s the difference between paying $2,500 per month at 6.375% or $2,770 at 7.375%. Over 30 years, you’re looking at $108,000 in additional cost—money that could have gone into investments, education, or simply enjoying life.

Despite this, surveys from Freddie Mac show that almost half of borrowers never compare multiple offers. They take the first quote their bank gives them, or the one their realtor casually points them toward. According to the CFPB, borrowers who shop around can save thousands over the life of their loan—yet too many skip this step entirely. That’s like buying the first car you test drive without looking at the price tag.

The solution? Know how the game is played and put yourself in position to win it.

What Drives Mortgage Rates

Rates aren’t plucked out of thin air. They’re shaped by a mix of national policy, global finance, and your personal financial profile.

1. The Federal Reserve and Inflation
   Rates move with inflation expectations. When inflation runs hot, the Fed hikes rates to cool demand. Over the last two years, Fed Chair Jerome Powell has made clear that rate cuts will only come when inflation is sustainably near target. That stance has put him at odds with former President Donald Trump, who has publicly pressured the Fed to slash rates sooner to stimulate the economy. Despite the political noise, Powell has stayed firm—reminding markets that the Fed’s dual mandate is inflation and employment, not election cycles. For a deeper dive on how Fed decisions influence mortgage rates, see our full guide: How Does the Fed Funds Rate Affect Mortgage Rates.

2. Bond Yields
   Mortgage rates track the yield on 10-year U.S. Treasury bonds. This benchmark is heavily influenced by the Fed Funds Rate, but it arguably plays an even more important role in setting mortgage rates than direct Federal Reserve policy announcements. Investors pile into Treasuries when they expect slower growth or recessions, driving yields (and mortgage rates) lower.

3. Lender Margins
   Lenders add their own margins on top of market benchmarks. One lender might quote 6.25%, another 6.75% for the exact same borrower. Banks in particular often have higher rates because their overhead is larger—they carry more regulatory costs, more compliance personnel, and bigger branch networks. Brokers, by contrast, operate with much smaller overhead and can pass those savings on to borrowers. That’s where shopping matters.

4. Your Profile
   Credit score, loan size, down payment, debt-to-income ratio, property type—all impact your offered rate. A higher score generally earns better pricing, larger down payments reduce risk and improve terms, and even the property type can change how lenders view the loan. Together these factors explain why two borrowers can receive very different quotes.

Step 1: Get Your Financial House in Order

Before you ever click “get quote,” prep work matters.

• Credit Score: The magic numbers are 620, 680, and 740. Crossing those thresholds typically unlocks better pricing. But you also have to live with the cards you’re dealt—you can’t turn a 620 into an 800 overnight. If you want to buy a house today, you can’t expect the same rate reserved for borrowers with perfect credit. That said, small, targeted changes can create dramatic improvements quickly. Ask your lender to run a “what if” simulation to identify the fastest, most cost-effective ways to boost your score. In many cases, a borrower sitting at 600 can move into the 700s in less than 30 days with the right adjustments—unlocking a noticeably better rate as a result.

• Debt-to-Income Ratio (DTI): Most conventional loans cap DTI around 45%. FHA loans may stretch higher.

• Down Payment: More equity lowers lender risk. A buyer putting 20% down will almost always see a better rate than one with 3%. That said, requirements and benefits vary by loan type. For jumbo loans, the minimum is usually 10% down, but you won’t like the rate at that level—it gets more attractive as you put down more. On the other hand, a 5% conventional mortgage for a first-time homebuyer often carries a rate similar to someone putting 20% down. For repeat buyers, though, increasing your down payment can definitely improve pricing. The key is to check with your lender to understand which scenario is best for your situation.

• Loan Type: FHA, VA, Conventional, and Jumbo loans all price differently. VA loans, for example, consistently offer lower average rates and no mortgage insurance—making them the best option for military families. FHA loans also tend to offer lower rates, but the tradeoff is mandatory mortgage insurance for the life of the loan, which can ultimately make them more expensive than a strong conventional rate if you qualify.

• ARMs vs. Fixed-Rate Mortgages. One of the biggest decisions you’ll face is whether to take a fixed-rate mortgage or an adjustable-rate mortgage (ARM). Fixed rates offer stability—you’ll know exactly what your payment will be for the life of the loan. ARMs, on the other hand, typically start with a lower rate for the first 5, 7, or 10 years before adjusting periodically. In markets where rates are elevated, ARMs can be a strategic choice for buyers who expect to sell, refinance, or pay down their mortgage within that initial period. But the tradeoff is risk: once the adjustment period kicks in, your rate can climb significantly depending on market conditions. For more on this dynamic, see our article ARMs Make a Comeback.

Step 2: Collect Multiple Offers

Here’s where most buyers drop the ball. One rate quote isn’t enough. Neither is two. Aim for at least three to five lenders or brokers.

• Mortgage Brokers vs. Banks: Your bank may know you, but they’re not incentivized to give you the lowest rate. Banks typically operate with higher overhead and less flexibility in their pricing, and they often rely on the convenience factor to keep you from shopping around. Brokers, on the other hand, shop dozens of wholesale lenders on your behalf, creating competition and lowering your cost. They can also match you with specialized programs, negotiate fees, and adapt quickly if your scenario changes. For a deeper comparison, see our article Mortgage Brokers vs. Banks: Who Really Gets You the Best Deal.

• Timing: Rates can change daily—even hourly, especially in this economy when tariffs could be announced (or rescinded) at any minute and send markets moving. When you shop, gather all your quotes within a short window so you’re comparing apples to apples.

• Loan Estimate (LE): After applying, lenders must provide a Loan Estimate within three business days. Don’t just glance at the top line—scrutinize the fees section.

Step 3: Compare the Full Package, Not Just the Rate

A “low rate” can hide thousands in fees.

• Discount Points: Some lenders advertise an ultra-low rate—but only if you pay thousands upfront to “buy it down.” Paying points can make sense in certain scenarios, especially if you know you’ll hold the loan long enough to hit the break-even point where the upfront cost is outweighed by the long-term savings. But too often, buyers pay for points without understanding whether it truly benefits them. Always run the numbers, and compare with alternative strategies. For a deeper breakdown, see our article Permanent Mortgage Rate Buydowns: Are They Worth Paying For?.

• Origination Fees: These can range from a few hundred to several thousand dollars. Brokers often negotiate lower fees because they work with multiple lenders.

• APR vs. Rate: APR reflects both the rate and the fees. It’s a truer measure of cost than the interest rate alone.

Step 4: Lock Strategically

A rate lock protects you from market swings, usually for 30–60 days, and it’s one of the most important tools a borrower can use to avoid nasty surprises before closing. Think of it as insurance: without a lock, you’re exposed to every market headline, Fed announcement, or inflation report that might hit between now and the day you sign. If rates jump a half-point during that period, your monthly payment could increase by hundreds of dollars.

Choosing the right lock period matters. Standard locks are 30 or 45 days, but longer options—60, 90, even 120 days—are available if you’re buying new construction or expect delays. Longer locks typically come with a cost, but that may be worth it to shield yourself in a volatile market.

Some lenders also offer free “float-down” options. This feature lets you lock in a rate now, then drop to a lower rate if the market improves before you close. Not every lender provides this, and those that do often set rules around when and how you can exercise it—so read the fine print carefully. Done right, a float-down gives you the best of both worlds: protection against rising rates with the ability to capture savings if the market shifts in your favor.

Timing your lock can be strategic. Rates often react to major economic releases like jobs reports, inflation data, or unexpected policy announcements. If you’re working with a broker who tracks these movements, you can sometimes shave off meaningful basis points by locking at the right moment.

The takeaway: don’t treat locking as a formality. It’s a key step in mortgage shopping strategy, and understanding your options could save you thousands. For a deeper explanation, see our article Free Float-Down: How to Protect Yourself When Rates Drop.

Step 5: Know When to Refinance

The rate you close with today isn’t your forever rate. Smart buyers use today’s market to capture value, then refinance later when rates fall. But refinancing isn’t just about chasing lower interest rates—it’s about improving your overall financial position. Knowing when to pull the trigger is critical.

According to our guide When Should I Refinance?, the best times to consider refinancing include:

• Lowering your monthly payment: Even a half-point reduction can save you hundreds per month.

• Eliminating mortgage insurance: FHA borrowers, in particular, may save thousands by refinancing into a conventional loan once they’ve built enough equity.

• Tapping home equity: Cash-out refinances can fund renovations, pay off higher-interest debt, or invest in new opportunities.

The key is to weigh the closing costs against the savings. Sometimes the break-even point is just a couple of years; other times it may not make sense. A broker can run the numbers for you and identify whether refinancing now—or waiting—is the smarter play.

Beyond Rates: Alternative Strategies for Savvy Borrowers

• Crypto-Backed Mortgages: For high-net-worth buyers holding Bitcoin or Ethereum, pledging digital assets can preserve wealth while qualifying for a mortgage.

• Asset Depletion Loans: Retirees or investors with large portfolios can qualify based on assets rather than traditional income.

• DSCR Loans: Investors can qualify based on rental income rather than personal income.

Real-World Examples: How Rate Shopping Pays Off

A recent client in Austin illustrates why shopping matters. He received a quote from a major national bank at 6.875% with $9,000 in discount points. By shopping through a wholesale network, we secured 6.5%—with zero points. The result? He saved $11,800 upfront and still lowered his monthly payment.

And he’s not alone. We’ve seen borrowers in Houston save over $6,000 in upfront costs simply by comparing three offers instead of one. In Dallas, another client shaved a quarter-point off their rate by locking at the right moment—saving nearly $200 a month. These are real savings, and they add up fast.

Want to track opportunities like this in real time? Sign up for our free LendFriend Rate Alerts. We monitor the market daily and notify you when conditions shift in your favor, so you’re never caught off guard.

Frequently Asked Questions About Rate Shopping

Does applying with multiple lenders hurt my credit?
No. Credit bureaus treat multiple mortgage inquiries within a 45-day window as one “shopping event", so make sure all quotes are received during this window.

Should I always pick the lowest rate?
Not necessarily. A slightly higher rate with lower fees may be cheaper if you plan to move or refinance within a few years. You also might opt for a rate that's slightly higher than your lowest rate because the lender is highly reputable, has great reviews and you want to make sure that you can close on time with no headache. Sometimes, the extra money is worth having a hassle-free experience. You don't want to risk your earnest money and buying your dream home because you went with an ultra discount lender who can't get the job done.

Can I switch lenders after I’m under contract?
Yes, but it can be tricky. Starting with a broker is better—they can pivot without disrupting your closing timeline. If you do switch, make sure you’re working with someone experienced who can still hit your closing date. They should be able to explain clearly how the transition works and how they’ll keep the process on track so you don’t lose your earnest money or the home you want.

How do I know if I’m getting a fair deal?
Compare at least three Loan Estimates, paying attention to APR, discount points, and lender credits.

The Bottom Line: Control What You Can

You can’t control inflation. You can’t control bond yields. But you can control how prepared you are, how many quotes you collect, and—most importantly—who you collect them from. The source of your quotes matters just as much as the number, because a broker with access to dozens of wholesale lenders will often show you options a single bank never could.

Mortgage rate shopping is about discipline, not luck. Whether you’re a first-time buyer in San Antonio, an upgrader in Dallas, or an investor in Houston, the same rule applies: the more you shop, the more you save.

Work with a mortgage broker who shops aggressively across dozens of lenders, negotiates terms, and structures loans that actually work for your life—not just for a lender’s balance sheet.

Because the right mortgage rate isn’t the lowest one you see. It’s the smartest one you secure.