Mortgage rates have fallen, and you can reduce your lender’s mortgage rate by more than three-quarters of a percentage point by improving your credit score. At best, it could save more than $58,000 interest over the life of a $300,000 home loan and lower your monthly payment $163. (Based on the difference in interest rates from the lowest to the highest credit tier for a loan with 20% down and one discount point, which we’ll dive into below.)
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Here are examples of average national mortgage annual percentage rates (APRs) by credit score tier for 2025. November, compiled by data and analytics firm Curinos for myFICO.com. We rounded the APR to the nearest hundredth.
Your credit score is a key component in determining your mortgage rate, but factors such as your debt level and down payment amount also play a role.
The table below shows representative credit score tiers with sample monthly mortgage payments and total interest paid over a 30-year period using the same loan parameters as above.
In addition to your credit score, mortgage lenders will consider factors such as:
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Your debt-to-income ratio. The DTI ratio is calculated by dividing your total monthly debt by your monthly income before taxes and deductions.
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Your mortgage loan-to-value ratio. The LTV ratio is the amount of your home loan compared to the home’s market value. This is primarily a function of your down payment.
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The amount of your contribution. The more money you put down, the lower your LTV. This gives the lender more collateral to work with. The more guarantees a lender has, the better your mortgage rate can be.
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The duration of your loan. The repayment period, called the “loan term,” can really affect your mortgage interest rate. A 15-year fixed rate mortgage has a lower interest rate than a 30-year fixed rate mortgage.
Decide whether to get a 15-year or 30-year mortgage term.
The most common type of mortgage is a conventional loan. Lenders make conventional loans based on qualifications set by government-sponsored companies Fannie Mae and Freddie Mac. The mortgage interest rates you see above are for conventional loans.
However, there are other loans that are backed by government agencies, such as:
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USDA Loans for Suburban and Rural Mortgages
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FHA loans are often used by first-time homebuyers with limited financial means.
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VA loans to borrowers with military connections.
Of all these loan types, VA loans often have the lowest mortgage rates.
MORE: Check out our selection of top VA mortgage lenders.
There are several initiatives underway that will change the credit score equation when buying a home.
Fannie Mae and Freddie Mac, the government-backed companies that guarantee most mortgages, have announced that they will begin considering VantageScore 4.0 scores in addition to traditional FICO credit scores.
That could help about 5 million Americans qualify for a mortgage or get a better interest rate, according to VantageScore.
Another change: FICO will soon provide credit scores directly to lenders instead of through the credit bureaus. This could reduce the costs borrowers pay for credit scores if the savings are passed on to consumers.
From 2025 November 3 A FICO credit score of 800 will earn you an APR of 6.51% on a 30-year fixed mortgage rate. This is based on the national average and your mortgage rate may be higher or lower depending on your down payment, property location and credit profile.
With an FHA loan, you can buy a $250,000 home with a credit score of at least 500 and a 10 percent down payment. A conventional loan will likely give you a lower mortgage rate, but you’ll need a FICO score of 620 to qualify.
Historically low mortgage rates of 3% and below are the result of the Federal Reserve’s aggressive rate cuts in response to the COVID pandemic. For interest rates to fall to such low levels again would pose an equally serious threat to the country’s economy.
A good mortgage APR would be 6.95% or less. This is an average interest rate based on current mortgage rates based on your credit score above. Freddie Mac announces that in 2025 October 30 the average 30-year mortgage rate is 6.17%. However, this rate may include taxes and discount points.
Laura Grace Tarpley edited this article.