8 Ways to Get a Lower Rate on Your Mortgage


8 Ways to Get a Lower Rate on Your Mortgage: In the realm of home buying, securing a lower mortgage rate can translate to significant savings over the life of your loan. Whether you’re a first-time homebuyer or looking to refinance, finding ways to lower the rates on your mortgage is essential for maximizing your financial wellbeing.  

Here are 8 effective strategies to help you secure a lower rate on your mortgage: 

1. Improve Your Credit Score: Lenders use your credit score as a key factor in determining your mortgage rate. To qualify for the best rates, focus on improving your credit score by paying bills on time, reducing debt, and monitoring your credit report for any errors. 


2. Compare: Don’t settle for the first mortgage offer you receive. Compare rates from multiple lenders to find the most competitive offer. Each lender has its own criteria for determining rates, so exploring different options can help you find the best deal. This can be especially time-consuming, so be sure to get help from a professional to do this correctly without doing damage.  


3. Increase Your Deposit: A larger deposit reduces the lender’s risk, which can result in a lower mortgage rate. Consider saving up for a larger deposit to qualify for better rates and potentially avoid Lenders Mortgage Insurance (LMI) altogether. This mark is generally around 20%, but it will vary from lender to lender. 


4. Consider a Shorter Loan Term: Shorter loan terms, such as a 15-year mortgage instead of a 30-year mortgage, often come with lower interest rates. While your monthly payments may be higher, you’ll pay less in interest over the life of the loan, resulting in significant savings. While better in the long-run, be certain you can keep up with the higher payments before going down this path. 


5. Lock in Your Rate: Mortgage rates can fluctuate daily based on market conditions. Locking in your rate guarantees that you’ll receive a specific interest rate for a set period. This protects you from potential rate increases while you complete the mortgage process, however it is possible for the standard rates to fall after you lock in a higher rate. 


6. Improve Debt-to-Income Ratio: Lenders consider your debt-to-income ratio when determining your mortgage rate. Lowering your debt or increasing your income can improve this ratio, making you a more attractive borrower and potentially qualifying you for a lower rate. 


7. Consider Government Programs: Government-backed loan programs often offer competitive interest rates and more flexible qualification requirements. Explore these programs to see if you qualify for a lower rate based on your unique circumstances. Your broker can guide you through lenders such as HomeStart, KeyStart and other programs designed for minority community sectors such as Indigenous home loans programs. 


8. Paying Interest in Advance: Perhaps one of finance’s best kept secrets are mortgage interest payments in advance. This allows you to pay interest for 6 or 12 months upfront. Lenders will often lower your interest rate over the life of the loan as an incentive. This means you can essentially pay a portion of your loan in advance to receive a discounted interest rate. Be sure to speak with the Glass team to see if this is a viable strategy for you.


Bonus Tip: Even if you’re not able to pay 6-12 months interest in advance, keeping your mortgage payments in advance and paying your loan repayments at the beginning of the month will save you interest costs and allow you to pay your mortgage off sooner by counteracting the compounding effect or mortgage interest. 

Securing a lower mortgage rate requires careful planning, research, and consideration of various factors. By implementing the 8 combination of the above, you can be well on your way to getting lower mortgage rate.  

There is, however,  one more way to get a lower rate – speaking with the expert team at Glass Financial! With decades of experience and knowledge on every aspect of lending, the Glass team is guaranteed to help you find the very best deal to suit your wants and needs. 

So give us a call today on 1300 245 277 or send an email to [email protected]  




More to explorer