An advertised mortgage rate assumes one borrower profile, loan type and property type. Your rate lands above or below that baseline based on the seven factors below, and you can change several of them before you apply. Current sample rates are on the rates page.
What sets the daily market baseline
Mortgage rates track the 10-year Treasury yield and the spread investors demand on mortgage-backed securities, which set the baseline every morning; the Fed funds rate moves them only indirectly. Inflation reports, jobs data and Fed guidance move the baseline. You cannot control the baseline; a rate lock (Factor 7) fixes it for your loan.
Factor 1: Credit score
Credit score is the largest single factor in agency pricing. Lenders use FICO scores from all three bureaus (Experian, TransUnion, Equifax) and use the middle score (with two borrowers, the agencies average the two middle scores).
Agency pricing steps down at every 20 points of score, and the steps get larger as scores fall; the difference between the 780+ tier and 620 is the widest on the pricing grid. The best tier starts at 780 (formerly 740). On the same loan, a 60-point score difference changes the rate; see the sample rates on the rates page.
How to raise your credit score
- Pay down credit card balances (utilization under 30%, ideally under 10%)
- Make every payment on time for 6+ months
- Don't open new credit accounts before applying
- Dispute errors on your credit reports
- Keep old accounts open (length of credit history matters)
Factor 2: Down payment and loan-to-value ratio
How much LTV matters depends on your score: with strong credit the rate difference between 3% and 20% down is small (mortgage insurance carries the risk); with weaker credit the difference widens. Below 20% down you also pay mortgage insurance, which is a separate line from the rate but lands in the same monthly payment.
First-time buyers with income at or below 120% of area median income get most agency pricing adjustments waived in DC, including on high-balance loans. For a first-time buyer under that income limit, the waiver is the largest pricing adjustment available.
Factor 3: Loan type
Conventional, FHA, and VA pricing
| Loan Type | Where it prices | Notes |
|---|---|---|
| VA | Lowest | The VA guaranty (25% of the loan) lowers lender loss exposure |
| Conventional (strong score) | Low | Best tiers at 780+ score with 20%+ down |
| FHA | Moderate | Plus upfront and annual mortgage insurance |
| Conventional (lower score) | Higher | Risk-based pricing widens at lower scores |
| Jumbo | Varies | Can be lower or higher than conforming |
VA prices below conventional because the VA guaranty lowers the lender's loss exposure. FHA prices near conventional, and its mortgage insurance raises the all-in cost.
Fixed-rate and adjustable-rate loans
A 15-year fixed prices below a 30-year fixed, at the cost of a much larger payment. An adjustable-rate loan can start lower than a 30-year fixed, and the rate and payment can rise after the fixed period. Ask your loan officer for a side-by-side comparison before choosing one.
Factor 4: Property type
Pricing by property type:
| Property Type | Pricing |
|---|---|
| Single-family home | Base |
| Condo (warrantable) | Base to slightly higher |
| Condo (non-warrantable) | Higher, lender by lender |
| 2-4 unit property | Higher |
| Co-op | Slightly higher, fewer lenders |
In DC: ask about the condo adjustment on any condo purchase. Non-warrantable condos carry the largest premium.
Factor 5: Occupancy
| Occupancy | Pricing |
|---|---|
| Primary residence | Base |
| Second home | Higher |
| Investment property | Highest |
Fannie Mae and Freddie Mac charge their largest occupancy adjustments on investment properties.
Factor 6: Loan amount
Conforming, high-balance, and jumbo loan amounts
- Conforming (up to $832,750): Standardized pricing backed by Fannie Mae/Freddie Mac
- High-balance conforming ($832,750 to $1,249,125 in DC): Still agency-backed, with a pricing adjustment; this band exists because DC is a designated high-cost area
- Jumbo (above $1,249,125 in DC): Portfolio-priced by each lender
Jumbo pricing can be lower or higher than conforming pricing on a given day, so compare the two on the day you lock.
Small loan amounts
Loans well below the conforming limit may carry slightly higher rates because the lender's fixed costs represent a larger percentage of the loan.
Factor 7: Rate lock period
| Lock Period | Pricing |
|---|---|
| 15 days | Lowest |
| 30 days | Base |
| 45 days | Higher |
| 60 days | Highest |
Longer locks cost more because the lender bears more interest rate risk. If a condo project review is needed, ask for a lock long enough to cover it.
Discount points
You can pay upfront to reduce your rate. One point is 1% of the loan amount and buys the rate down; how much depends on the day's pricing. Divide the point cost by the monthly saving to get your break-even; if you will sell or refinance before then, skip the points. The rates page shows the points assumed for each sample rate.
How to lower the rate you qualify for
- Raise your credit score before applying: credit score has the largest single effect on agency pricing
- Save for a larger down payment: moving from 5% to 10% down can lower the price
- Compare Loan Estimates from the same day on APR and total cost
- Compare the same loan type: 30-year fixed to 30-year fixed
- Compare total cost: a lower rate with high fees can cost more than a slightly higher rate with low fees
- Lock when the rate works for your budget: rates change daily, and a lock fixes the rate for the lock period
How to read a Loan Estimate
Every lender must provide a standardized Loan Estimate within 3 business days of your application. Compare:
- Section A: Origination charges (lender fees)
- Section B: Services you cannot shop for
- Section C: Services you can shop for
- Interest rate and APR: APR includes fees, making it better for comparison
- Total interest percentage: How much interest you'll pay over the life of the loan
The APR is the most useful single number for comparing offers, but also look at total lender fees and monthly payment separately.
See today's rates or get pre-qualified: two minutes, no credit pull.