Buying a home is one of the biggest financial decisions most people ever make. Even a small difference in mortgage interest rates can cost—or save—you tens of thousands of dollars over the life of a loan.
In this guide, we’ll explain how mortgage rates work, what influences them, and how to find the best mortgage rates in 2026 so you can confidently secure an affordable home loan.
What Are Mortgage Rates?
Mortgage rates are the interest rates lenders charge for borrowing money to purchase a home. They determine how much you’ll pay each month and the total cost of your loan over time.
Mortgage rates can be:
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Fixed-rate (remain the same for the life of the loan)
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Adjustable-rate (ARM) (change periodically after an initial fixed period)
Why Mortgage Rates Matter So Much
Mortgage rates have a huge impact on affordability.
For example, a 0.5% lower rate on a 30-year mortgage can save thousands of dollars in interest. Lower rates mean:
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Lower monthly payments
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Reduced total interest paid
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Greater buying power
That’s why shopping for the best rate is essential.
Factors That Affect Mortgage Rates in 2026
Economic Conditions
Inflation, Federal Reserve policy, and overall economic health strongly influence mortgage rates.
Credit Score
Borrowers with higher credit scores typically qualify for lower rates.
General guideline:
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Excellent credit → lowest rates
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Lower credit → higher rates
Loan Term
Shorter loan terms usually offer lower rates.
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15-year mortgages → lower interest, higher monthly payments
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30-year mortgages → higher interest, lower monthly payments
Down Payment Amount
Larger down payments reduce lender risk and can result in better rates.
Loan Type
Different loans come with different rate structures.
Common options include:
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Conventional loans
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FHA loans
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VA loans
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USDA loans
Each has its own requirements and pricing.
Fixed-Rate vs Adjustable-Rate Mortgages
Fixed-Rate Mortgages
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Predictable payments
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Ideal for long-term homeowners
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Protection against rate increases
Adjustable-Rate Mortgages (ARMs)
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Lower initial rates
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Rates adjust after fixed period
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Better for short-term ownership
Choosing depends on how long you plan to stay in the home.
How to Find the Best Mortgage Rates
1. Improve Your Credit Score
Higher credit scores unlock lower interest rates. Paying down debt and correcting credit report errors can help.
2. Compare Multiple Lenders
Rates and fees vary between lenders. Always compare offers from:
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Banks
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Credit unions
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Online lenders
3. Understand APR vs Interest Rate
APR includes interest plus fees, providing a clearer picture of total loan cost.
4. Consider Buying Mortgage Points
Paying points upfront can lower your interest rate over time.
This works best if you plan to stay in the home long term.
Mortgage Rate Locks Explained
A rate lock guarantees your interest rate for a specific period, protecting you from market fluctuations during the loan process.
Rate locks typically last:
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30 days
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45 days
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60 days
Locking at the right time can save money.
Common Mortgage Rate Mistakes to Avoid
Avoid these costly errors:
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Not shopping around
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Ignoring fees and closing costs
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Choosing a loan solely based on rate
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Forgetting about long-term affordability
A slightly higher rate with lower fees may be a better deal.
Are Refinance Rates Different?
Yes. Refinance rates can differ from purchase rates and depend on:
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Home equity
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Credit score
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Loan-to-value ratio
Refinancing at a lower rate can reduce payments or shorten loan terms.
Is 2026 a Good Time to Get a Mortgage?
Market conditions fluctuate, but borrowers can still find competitive rates by:
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Maintaining strong credit
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Comparing lenders
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Choosing the right loan type
Timing matters, but preparation matters more.
Final Thoughts
Finding the best mortgage rates in 2026 requires research, comparison, and financial readiness. By understanding what affects rates and taking proactive steps, you can secure a mortgage that fits your budget and long-term goals.
A home loan isn’t just about buying a house—it’s about building financial stability for the future.