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Can You Negotiate Mortgage Rates With Your Lender?

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Most homebuyers start their house hunt expecting to negotiate with sellers, but there’s another question many never stop to ask: “Can you negotiate mortgage rates with lenders?” The answer is yes — buyers can negotiate better mortgage rates and other fees with banks and mortgage lenders. On the other hand, those buyers without a mortgage negotiation strategy may be leaving money on the table.

How to negotiate mortgage rates

The excitement of getting approved for a mortgage may tempt some homebuyers to jump right into the shopping stage of the homebuying process. However, buyers who pause and consider how to negotiate mortgage rates stand to save money over the life of the loan: The interest rate on a home loan is a significant factor in your monthly payment and the total loan cost.

Here’s how to get the best mortgage rate with your lender.

1. Know where you stand

The first step is to have a firm idea of your credit history and financial situation. The better your credit score and history, the stronger position you’ll be in to negotiate mortgage rates.

If you haven’t checked your credit yet, you can request your credit report for free from each of the three major credit reporting bureaus at

2. Know what mortgage terms you want and need

Familiarize yourself with the loan options available to you. When it’s time to negotiate mortgage rates, you’ll want to make sure that the loan terms fit within your budget and long-term plans. For example, variable interest rates are typically lower than fixed interest rates initially, but could be less affordable later.

It’s crucial to know upfront in your mortgage negotiation strategy what type of loan and terms you’re looking for, and how they may affect the cost of the loan. A mortgage calculator can help you estimate your monthly payment and loan costs.

3. Get quotes from multiple lenders

Once you have an idea of the type of mortgage you want, you can start loan shopping. One of the best home loan negotiation tips is to get quotes from at least three different lenders. You can do this by working with a mortgage broker who will get quotes from multiple lenders, or you can go directly to banks and mortgage companies.

As you think about how to negotiate mortgage rates, consider not only getting quotes from multiple lenders, but also from a variety of lenders. For example, you may want to apply with at least one credit union, one national bank and one online lender.

You should also keep track of your loan estimates, so you can compare them and position yourself to negotiate.

4. Compare total loan costs

In addition to the interest rate, you’ll want to look at each lender’s fees, such as origination fees or mortgage insurance (if applicable). Not only do mortgage lenders match rates, but they may also lower some of their charges.

Since fees differ between lenders, it may be confusing to figure out how to negotiate home loans from multiple banks. A helpful way to compare the terms and fees between several lenders is to look at each loan’s annual percentage rate (APR). The APR reflects the total cost of the loan, including fees, and is typically higher than the interest rate. This figure is a straightforward way to compare multiple loans at a glance.

5. Negotiate with your lender

Once you have multiple quotes, you may decide you like one lender over another. If the bank you prefer doesn’t have the lowest rate, you can negotiate the mortgage rate down.

Ask the lender if they can do better on the rate they provided. Or, you can let them know another bank has offered you a lower rate and ask if they can match or beat it. Some lenders may be willing to lower their rate to gain your business — or keep it, in the case of working with your existing lender.

6. Consider locking in the interest rate

Protect the best quote you receive with a mortgage rate lock if there’s a chance the rate may increase before you close. Work with your loan officer to determine whether locking in the rate is a good idea and ask about potential rate lock fees.

Things to know about negotiating mortgage fees

While the interest rate is a significant factor in the cost of your loan, it’s not the only one that affects the loan price: You’ll also need to cover additional borrowing costs. During your negotiations with lenders and third-party services, plan on comparing and negotiating mortgage fees as well.

Mortgage fees and typical costs
Fee type How much?
Application fee

The cost to apply for a mortgage. It may also include the cost of pulling your credit reports and scores.

$25 to $150
Loan origination fee

The cost to process, document, underwrite, administer and fund a mortgage.

1% of the loan amount
Discount points

Also known as mortgage points, this cost allows you to “buy down” your mortgage interest rate.

1% of the loan amount per point
Commitment fee

The cost to guarantee a loan for a future date.

Rate lock fee

The cost to lock in a specific mortgage rate. Some lenders may not charge a fee for the initial rate lock, but if your rate lock expires before your loan closes, there may be an extension fee.

Up to 0.5% of the loan amount for a rate lock extension
Pest inspection fee

The cost associated with having the property inspected for termites or other infestations.

$75 to $500
Survey fee

The cost associated with surveying the land on which the property sits and identifying its boundaries.

$85 to $600
Title services

The fees related to transferring ownership of the property, including title search, title insurance for both the lender and the homeowner and a settlement agent fee.


Closing costs typically range from 2% to 6% of the loan amount. On a $300,000 home, that amounts to $6,000 to $18,000, so negotiating mortgage fees in addition to negotiating a better mortgage rate can provide significant savings.

Fees that can’t be negotiated

Unfortunately, some mortgage fees are fixed — in most cases, there won’t be much wiggle room, if any at all, on these costs:

  • Appraisal fee: The cost associated with determining a home’s value.
  • Credit report fee: The cost to pull your credit history.
  • Flood determination fee: The cost to determine whether the property is in a flood-prone area.
  • Flood monitoring fee: The cost to monitor the property’s location for changes to flood zone designation.
  • Tax monitoring fee: The cost to monitor that the property taxes are paid on an ongoing basis.
  • Tax status research fee: The cost to determine the homeowner’s property tax payment status.

Even though you may not be able to negotiate these fees, you should still compare them when looking at quotes from multiple lenders. Fees mandated by local or state laws will be the same among lenders, but others, like appraisal and credit report fees, can vary.

7 ways to improve your mortgage negotiation strategy

Now that you know it’s possible to negotiate mortgage rates, it’s crucial to approach the mortgage process strategically. Here’s how to get a lower interest rate on a mortgage.

  1. Strike while your credit is at its best. If you have some blemishes in your credit history, you may want to consider waiting until you’ve made significant improvements.
  2. Make apples-to-apples comparisons. Be sure you’re comparing similar loan terms when negotiating mortgage fees and rates.
  3. Give yourself a deadline for completing your negotiations. Rates fluctuate, so give yourself a time frame to compare and negotiate better mortgage rates. If you drag out the process, you risk the rates changing, making it more challenging to negotiate mortgage rates among multiple lenders.
  4. Be mindful of changes to other loan terms. Be sure you understand all of the terms of the mortgage. Watch out for lenders who agree to negotiate mortgage rates, but increase their mortgage fees to compensate for lower rates.
  5. Leverage customer loyalty. If you already have a relationship with a particular lender, one of the best home loan negotiation tips for you might be to use your existing customer status. Your lender may be amenable to negotiating mortgage fees with you.
  6. Get everything in writing. Make sure you review the terms on each lender’s loan estimate. This will position you to negotiate better mortgage rates with one lender over another.
  7. Make a larger down payment. Increasing your down payment can put you in a better position to negotiate mortgage rates with lenders, and you may also score a lower mortgage rate with a larger down payment. Plus, if you put down at least 20%, you’ll avoid mortgage insurance, which is added to your monthly mortgage payment.

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