If you’ve been trying to buy a home this year, you’ve likely seen the wide fluctuations occur in mortgage rates. By late February, the average 30-year fixed mortgage rate had dropped to 5.87%, the lowest point since September 2022
Things changes, though, when the war in Iran pushed oil prices and inflation higher, and mortgage rates followed. The average 30-year fixed rate now stands at 6.87% as of early August, a full percentage point higher than it was just a few months ago. On a $375,000 loan, that 1% increase adds about $245 to the monthly payment
But the news isn’t all bad. In some cases, buyers may be able to take advantage of this year’s rate volatility to potentially negotiate a lower home price. We asked three mortgage professionals how buyers can do that — and which strategies are working now. Here’s what they had to say
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How to negotiate a lower home price in today’s economy, according to experts
Higher mortgage rates make a home more expensive, so how could they possibly help you get a better deal from the seller? Can mortgage rate volatility really give buyers more negotiating power?
“Indirectly, yes,” says Craig Garcia, president at Capital Partners Mortgage. “Typically, rate volatility, all other things being equal, can be discouraging for some buyers.”
Garcia says some buyers are holding off because they hope rates will come back down, leading to opportunities for negotiations with sellers, many of whom are likely seeing less interest from homebuyers. Case in point? Mortgage applications fell 6.4% for the week ending July 24 when rates hit their highest level since August 2025, according to data from the Mortgage Bankers Association
“When rates spike like they have in the summer, buyers pause their home searches which brings less competition,” says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation. “With less competition, buyers have an advantage in negotiations with sellers even more.”
When a seller has fewer buyers and offers to choose from, they may be more inclined to accept an offer they might’ve refused just a few months ago
“When rates move higher, there are buyers that head to the sidelines, forcing sellers to reduce prices or offer concessions to the purchase in order to get the home sold,” says Melissa Cohn, regional vice president at William Raveis Mortgage. “I see more buyers asking and getting concessions, especially if there are any repairs needed.”
Start by deciding how much you’re willing to pay for the home and ask your agent whether the seller may be open to an offer below the asking price
“I have seen buyers coming in with lowball offers, and some get the new home at prices below where they may have ended in a less volatile rate environment,” Cohn says
You may also be able to lower your mortgage rate by asking the seller to pay for a mortgage rate buydown. This upfront payment can reduce your rate permanently or for the first year or two of the loan. In some cases, it can save you much more than a price cut
“Buyers can get significantly more bang for their buck when asking for rate buydown concessions from sellers in lieu of price reductions,” Garcia says. “When using the equivalent dollars of a price reduction instead of a permanent rate buydown, the payment impact was 2.5 times greater than just reducing the price. When using the equivalent dollars of a price reduction to a temporary buydown, the payment impact was 10 times greater than the price reduction, albeit for the first year only.”
A temporary rate buydown can reduce what you pay out of pocket during your first two years in the home.
“A two-year buydown will drop the rate by 2% the first year, 1% the second year and costs the seller less than 2% of the loan amount,” Cohn says
However, with this setup, your monthly mortgage payment increases after the first year and again when the discount ends, so make sure you can afford the full payment before agreeing to the loan
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How to secure a below-average mortgage rate right now
Negotiating a lower home price can help you make a home more affordable, and you may also be able to get a more favorable mortgage rate in today’s landscape, which could reduce your monthly payment
Start by getting quotes from at least a few mortgage lenders to compare rates.
“Shopping around is key in a volatile rate environment,” Cohn says. “Rates do differ from bank to bank.”
You might also look into an adjustable-rate mortgage (ARM) loan, which typically starts with a lower fixed rate than a comparable 30-year fixed loan, before adjusting later. An ARM can be risky because it can rise or fall over time. However, it may be a solid option if you plan on moving, selling or refinancing before the adjustment period begins. Consider whether an ARM is worth it for your situation before making a decision
If you have a few months before you must apply for a mortgage, use that time to pay down your credit card balances and make consistent on-time payments. That may improve your credit score and help you potentially qualify for a lower rate
“Small changes in their current debt structure can sometimes lead to short-term opportunities to optimize their credit score, leading to more favorable terms they may qualify for,” Garcia says.
Garcia recently saw a borrower whose $400 credit card paydown stood to cut loan fees by almost 3% of the loan amount
The bottom line
You may also be able to negotiate your closing costs with the seller or your lender to lower the amount you need to pay upfront. These costs include expenses such as the appraisal and loan origination fees and typically range from 2% to 5% of the home’s purchase price. On a $400,000 home, that would add about $8,000 to $20,000 to your upfront costs
If the seller is motivated to close the deal, they may agree to cover part of those costs with a seller credit. Ultimately, negotiating a lower price, mortgage rate and closing costs could all combine to make your home purchase much more affordable than you might expect in today’s economy
