5 Smart Ways to Lower Your Mortgage Interest Rate in 2025

If you're planning to buy a home in the Greater Seattle area in 2025, you're likely keeping a close eye on interest rates. Because home loans tend to be large sums of money, even a small reduction in your mortgage rate can save you tens of thousands of dollars over the life of your loan.

Whether you're buying in Seattle, Bellevue, Redmond, Kirkland, Bothell, or any of the surrounding cities in King County, these 5 smart strategies can help you secure a better interest rate and boost your long-term financial well-being.

And if you're more of a visual learner, be sure to watch my full YouTube video here where I break these down in detail!

1. Compare Mortgage Rates from Multiple Lenders

I always advise my clients to speak to multiple lenders to get a sense for their process, the products they offer and the rates they can secure. Rates and loan products can vary widely between banks, credit unions, and mortgage brokers. Even a 0.25% difference can impact your monthly payment and how much interest you end up paying over the life of the loan.

💡 Pro tip for Seattle & Eastside buyers: Local lenders familiar with the King County market can sometimes offer better options or move more quickly in competitive situations. Ask the lenders you interview what their average time to close is and how they handle competitive scenarios. At the end of the day, the rate is important but it’s not the only factor to consider.

2. Check Your Credit Score and Improve It if You Can

Your credit score is one of the biggest factors lenders use to determine your interest rate. Before applying for a mortgage, pull a free credit report and see where you stand. You can get a free credit report from any of the three major credit beauties including Trans Union, Equifax, or Experian. Even small improvements (like paying down a credit card or correcting an error) can make a big difference.

If you’re working to improve your credit score, try avoiding opening new credit cards if possible as it lowers your credit age which is a significant factor to your score and consistently spending less than your total credit limit.

Why does credit matter so much when it comes to the rate you can secure? 📈 Higher credit score = lower risk to the bank = a better rate for you.

3. Increase Your Down Payment

The more money you put down, the less risk the lender takes on, which can ultimately lead to a lower rate. If you're struggling to boost your down payment, consider:

• Borrowing against stock or investment accounts

• A gift or personal loan from family

• Tapping into other assets strategically
  
  

Many homebuyers are getting creative with their financing to get better terms. Just make sure you run any plan by your lender and financial advisor first to understand what makes the most sense for your personal financial situation.

4. Buy Points (a.k.a. Mortgage Rate Buy-Downs)

Did you know you can pay to reduce your interest rate? This is called "buying points." Each point typically costs 1% of the loan amount and lowers your rate by about 0.25%. Even better: in some cases, you can negotiate for the seller to cover the cost of the rate buy-down as part of your offer.

This strategy is especially powerful in slower market conditions or for homes that have been sitting on the market without offers for a while, where sellers may be more flexible.

5. Explore Alternative Loan Types

Most buyers default to the 30-year fixed mortgage, but it’s not the only option. If you can afford a higher monthly payment, a 15-year loan often comes with a much lower interest rate.

Other products like ARMs (adjustable-rate mortgages) may also offer lower initial rates, which could be smart if you’re not planning to stay in the home long-term. Many buyers are off put by the sound of a variable rate but these products have evolved over the years and may make sense for you depending on your goals. It’s always worth exploring the options so you know what they are and can make an informed decision.

Of course, we always recommend you talk to your lender about which options make the most sense for your goals and timeline.

The Bottom Line: Don’t Leave Money on the Table

Securing the lowest possible mortgage interest rate isn't just about timing the market, it's about being informed and strategic. As a local real estate expert serving Seattle, Bellevue, Redmond, Kirkland, Bothell and surrounding areas, my goal is to help buyers make financially smart decisions every day. Remember, when rates are higher, there tends to be less competition amongst buyers which means opportunity for you.

👉 Want to dive deeper into these tips? Watch my YouTube video here for the full breakdown.

📩 Ready to start the homebuying process or have questions about your buying power? Contact me for a free, no pressure consultation.