You see it on the news: "Mortgage rates hit 7.40%." Then you call a lender and get a different number. And your neighbor, buying the same week, gets a different number again.
What gives? The rate in the headlines is an average for a very specific type of borrower. Your rate depends on you. Here is how it works, and what you can do about it.
Quick answer: The widely quoted Freddie Mac average is based on conventional loans for borrowers who put 20% down and have excellent credit. Your own rate depends on seven personal factors identified by the Consumer Financial Protection Bureau (CFPB): credit score, home location, home price and loan amount, down payment, loan term, interest rate type, and loan type.
Where the Headline Rate Comes From
The rate you usually see in the news comes from Freddie Mac's weekly Primary Mortgage Market Survey. As of October 15, 2026, the 30-year fixed rate averaged 7.40%.
But Freddie Mac notes that its survey focuses on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. If that does not describe you, your rate may be different.
The 7 Things That Shape Your Rate
According to the CFPB, seven personal factors affect your mortgage interest rate:
- Credit score. In general, borrowers with higher credit scores receive lower interest rates.
- Home location. Rates can vary depending on where the home is.
- Home price and loan amount. Buyers can pay higher rates on loans that are particularly small or particularly large.
- Down payment. This one has a twist, explained below.
- Loan term. For example, a 15-year loan versus a 30-year loan.
- Interest rate type. Fixed or adjustable.
- Loan type. Such as conventional, FHA, or VA.
The CFPB stresses that it is the combination of these factors, not any single one, that determines your rate.
The Surprising Down Payment Twist
You might assume a bigger down payment always means a lower rate. But the CFPB notes that in some cases you could be offered a slightly lower interest rate with a down payment just under 20% than with one of 20% or more. That is why it pays to compare a few scenarios with your lender.
Points: Paying Now to Save Later
Discount points let you lower your interest rate by paying an upfront fee at closing. One point equals 1% of your loan amount, so one point on a $300,000 loan costs $3,000. One point typically lowers the rate by less than 1%, and the exact reduction depends on the lender and the loan.
Ask your lender to show you the rate and cost with and without points.
Rate vs. APR
Your interest rate is not the only number to compare. The annual percentage rate (APR) reflects the yearly cost of the loan, which lets you compare mortgages for the same loan amount more fairly.
How to Get Your Best Rate
- Check your credit early and fix any errors before you apply.
- Compare at least three Loan Estimates. The CFPB suggests asking at least three lenders for a Loan Estimate on the same kind of loan.
- Shop around. Freddie Mac's chief economist has noted that borrowers can potentially save thousands of dollars by shopping for the best rate.
- Ask about points and different down payment amounts to see which combination works best for you.
(For the full list of what you will pay at closing, see Texas Closing Costs Explained.)
Frequently Asked Questions
Why is my mortgage rate higher than the rate on the news? The Freddie Mac average in the news is based on conventional loans for borrowers with 20% down and excellent credit. Your rate depends on your credit score, down payment, loan type, and other personal factors.
What is a discount point? An upfront fee that lowers your interest rate. One point equals 1% of your loan amount and typically lowers the rate by less than 1%.
Does a bigger down payment always get a lower rate? Not always. The CFPB notes you could sometimes be offered a slightly lower rate with a down payment just under 20% than with one of 20% or more.
How many lenders should I compare? The CFPB suggests asking at least three lenders for a Loan Estimate.
Get Matched With the Right Lender
The right loan can matter as much as the right house. Ryan Adams and The Adams Group TX work with buyers to compare lenders and plan around today's rates. Call us at (832) 308-7633 or visit us at 5822 Sienna Parkway, Suite 500, Missouri City, TX 77459.
