Can I Negotiate My Mortgage Rate?

YES. Many borrowers don't know you can negotiate your rate, but many loan officers expect you to negotiate. Lenders are often willing to adjust mortgage rates, fees, or terms to win your business. It is a competitive business and lenders WANT your business. Negotiating your mortgage rate can lead to significant savings over the life of your loan.

When you're ready to negotiate, use these strategies:

a. Highlight Competing Offers

If another lender offers a lower rate or better terms, ask your preferred lender to match or beat it. Say:

"Lender B offered me a rate of X% with lower closing costs. Can you match or improve on this?"

Having a Loan Estimate from a competitor is the strongest way to negotiate terms.

b. Ask About Discounts

Lenders may offer discounts or rate reductions for:

• Buying Mortgage Points: Pay an upfront fee to lower your rate.

• Automatic Payments: Some lenders lower rates if you set up auto-pay from your bank account.

• Bundling Services: If the lender also offers banking or investment services, bundling them may result in discounts.

  
  

c. Inquire About Fee Reductions

Even if the rate itself can’t be reduced, ask about lowering fees, such as:

• Origination fees

• Application fees

• Appraisal fees

These savings can reduce your overall loan costs.

d. Rate Locks

Make sure to lock your rate when you have found a lender with rates and terms you like. Make sure to ask for a "float down" with your lock, which will allow you to lower your interest rate if rates drop during your lock period.

e. Use Timing to Your Advantage

Lenders often have quotas or targets to meet. Applying at the end of the month, quarter, or year may make them more willing to negotiate to close your deal.