Mortgage rates quoted in the headlines don't necessarily reflect what an individual homebuyer will pay, with actual rates varying by nearly a full percentage point among many borrowers.
Realtor.com says shopping among lenders can produce immediate savings, while improving a credit score — particularly above 700 and 720 — can also lower borrowing costs.
The difference between rates offered to borrowers can translate into tens of thousands of dollars in purchasing power, making comparison shopping especially important when rates are high.
Mortgage rates may be hovering around 7%, but homebuyers shouldn't assume that's the rate they'll have to pay.
A new Realtor.com analysis finds surprisingly large differences in the mortgage rates borrowers actually receive, even when they take out loans at roughly the same time. Those differences can have a significant effect on how much house a buyer can afford.
The study analyzed more than 1.35 million purchase mortgages originated from January 2023 through December 2025. It found that credit scores, down payments, and the lender a borrower chooses can all affect the final interest rate.
"Mortgage-rate headlines matter, but they are not the whole story," Realtor.com senior economist Jake Krimmel said. He noted that the gap between a typical mortgage offer and a particularly competitive one can translate into thousands of dollars of additional purchasing power.
Nearly a percentage point separates many borrowers
Krimmel illustrates the difference by assuming the median borrower receives a 7% mortgage rate.
Under that scenario, half of borrowers would receive rates ranging from about 6.73% to 7.21%. Looking at the middle 80% of borrowers produces an even wider range — from 6.50% to 7.43%.
That's a 0.93 percentage-point spread.
For someone budgeting $2,000 a month for mortgage principal and interest, the difference would amount to roughly $28,400 in home-buying power.
In other words, two consumers shopping for homes at the same time could qualify for significantly different mortgage rates — and potentially different-priced homes.
Shopping lenders may provide the quickest payoff
For consumers already preparing to buy a home, comparing lenders may be the easiest way to lower the rate.
The analysis found that a particularly competitive retail lender offered rates about 17 basis points below the Freddie Mac benchmark, while a typical retail lender was about two basis points above it.
That creates a difference of about 19 basis points between a typical lender and a highly competitive one. On a $2,000 monthly principal-and-interest budget, Realtor.com estimates that difference is worth about $5,800 in additional purchasing power.
That's why buyers may want to request loan estimates from several lenders rather than simply applying with their bank or the first mortgage company they encounter.
But borrowers should compare more than the advertised interest rate. Closing costs, lender fees, and discount points can make a mortgage with a seemingly attractive rate more expensive than it first appears.
A better credit score can also lower the rate
Credit scores produced the largest independent effect on mortgage rates among the borrower characteristics the company studied.
The biggest benefits appeared around particular credit-score thresholds. Crossing both the 700 and 720 marks was associated with a rate improvement of about 5.5 basis points at each threshold.
Moving from a credit score in the 680s to 720 was associated with an improvement of about 11 basis points, providing approximately $3,200 more purchasing power under the's $2,000-a-month example.
The difference becomes larger across a wider credit range. Borrowers with scores of 780 or higher received rates about 32 basis points better than borrowers with scores below 640, after controlling for other factors. That translated into approximately $10,100 more home-buying power.
For consumers who don't plan to buy for several months, that means paying bills on time, reducing credit-card balances, and correcting credit-report errors could potentially produce savings when it comes time to apply for a mortgage.
The 20% down payment isn't all about the rate
The report also challenges a common assumption about down payments.
Moving from a 15%-19% down payment to exactly 20% produced only a very small improvement in the mortgage rate — about 0.7 basis points.
The bigger advantage of reaching 20% is generally the ability to avoid private mortgage insurance.
For borrowers putting down less than 20%, however, moving from a 5%-9% down payment to 10%-14% was associated with a 5.5-basis-point rate improvement, the largest step identified below the 20% threshold.
Buyers therefore need to consider the entire monthly payment rather than focusing exclusively on the mortgage rate.
What homebuyers can do
The research suggests buyers have more control over their mortgage costs than the weekly rate headlines might imply.
Someone planning to purchase a home in the future can work on improving their credit score and increasing their savings. Someone ready to buy now may have less time to change those factors, but can still solicit offers from several lenders and compare rates, fees, points, and closing costs.
There's an important limitation to the findings. The analysis is based on conventional mortgages acquired by Freddie Mac and does not include FHA, VA, jumbo, or portfolio loans. The underlying data also doesn't identify discount points, meaning some borrowers who received lower rates may have paid upfront to obtain them.
However, the research offers a useful lesson for buyers confronting today's elevated borrowing costs: the mortgage rate reported in the news is a benchmark, not necessarily the rate you'll receive.