The tactics are well known: discount points, temporary buydowns, adjustable-rate loans, government-backed loans, assumable mortgages, shorter terms. What is less commonly explained is which ones make borrowing cheaper and which ones simply relocate the cost.
That distinction determines whether any of these is right for a specific buyer, so it is worth going through them by that standard rather than by rate.
Genuinely free, with no trade-off
Two things reduce cost without a corresponding sacrifice.
Shopping multiple lenders is the first, and the returns are larger than most people assume. One buyer profiled recently contacted four lenders, played them against each other, and refinanced from a 7.1% thirty-year loan into a 4.75% fifteen-year loan that raised his monthly payment by only about $300. Lender pricing varies substantially for identical borrowers, and competing written offers are the only thing that reliably moves it.
Assuming a seller's existing mortgage is the second, and it is the only tactic on this list that is genuinely free money, because you inherit a below-market rate someone else locked in years ago. The catch is availability and cash. In 2025, nearly 25,000 listings advertised an assumable mortgage, about 0.62% of all listings, up from 0.53%, against roughly 12 million government-backed loans outstanding.
The larger constraint is structural. An assumption transfers the existing loan balance, so the buyer must cover the difference between that balance and the purchase price in cash or a second loan. On a home that has appreciated substantially, that gap can be hundreds of thousands of dollars, which means assumable loans are practically available mainly to buyers with large amounts of cash. The people who most need a 3% rate are the least able to use one.
Genuinely cheaper, with a real trade-off
Shortening the term is the one tactic that reduces total interest rather than rearranging it. Fifteen-year loans price meaningfully below thirty-year loans, and the shorter amortization compounds that advantage.
The trade-off is payment, not cost. A fifteen-year loan on the same balance carries a materially higher monthly obligation, and that obligation is fixed. The refinancing case above worked because the borrower was replacing a high rate on an existing balance, which is the situation where the math is most favorable. A purchase buyer choosing fifteen years is accepting a much larger required payment in exchange for a lower rate and faster equity.
Government-backed loans also price below conventional, but the rate is not the whole cost. FHA loans carry mortgage insurance premiums that in many cases persist for the life of the loan, so a lower rate can accompany a higher all-in payment. VA loans, for eligible borrowers, are the strongest version of this category.
Cost relocation, not cost reduction
Discount points are prepaid interest, and calling them a discount obscures what is happening. Each point costs 1% of the loan amount and typically reduces the rate by about 0.25 percentage points, so on a $400,000 loan, $4,000 buys a move from roughly 6.22% to 5.97%.
You have not been given anything. You have paid cash today for a lower payment later, and whether that is a good trade depends entirely on how long you keep the loan. The break-even is the point cost divided by the monthly savings, and if you sell or refinance before reaching it, you lost money. Given that most thirty-year borrowers move or refinance well before maturity, points frequently fail their own test.
Temporary buydowns are the same mechanism, stated more plainly in the industry's own description: the cost of a temporary buydown equals the amount the borrower would save over the reduced-interest period, which essentially makes it a way to prepay interest on the buyer's behalf.
Read that carefully. The cost equals the savings. In dollar terms it nets to zero, with the only benefit being timing, lower payments early, full payments later. That can be genuinely valuable for a buyer expecting income growth. It is not a discount, and builder advertisements showing rates as low as 0.99% are frequently temporary structures that step up annually toward market over two or three years.
Adjustable-rate mortgages are a risk trade. A five-year ARM averaged about 6.2% against 6.6% on a thirty-year fixed in early June. That 40 basis points is compensation for accepting reset risk. Whether it is adequate compensation depends on the odds that rates are lower at reset, which nobody knows, which is precisely why the borrower is being paid to take the position.
The seller-paid buydown question
Here is the part worth thinking hardest about, because the conventional advice points one way and the analysis is more balanced than it appears.
With 64% of builders offering sales incentives as of March 2026, many buyers face a choice between a seller-paid rate buydown and an equivalent price reduction. The common advice is that the buydown saves more, and on monthly payment alone that is often correct: a rate reduction applies to the entire loan balance, while a price cut only reduces the amount borrowed.
But the monthly comparison is incomplete in three ways.
A price reduction is permanent and portable. It lowers your principal forever, and the benefit survives a refinance. A buydown's value exists only as long as you keep that specific loan. Refinance in three years and everything the buydown was worth from that point forward disappears.
A price reduction lowers your property tax basis in most jurisdictions, which is a recurring annual saving the buydown does not provide.
And a price reduction increases your equity immediately, which matters for private mortgage insurance removal and for resilience if prices soften.
So the honest rule is conditional on your rate outlook. If you expect to hold the loan a long time, the buydown likely wins on total dollars. If you expect to refinance when rates fall, which is precisely what a buyer accepting a 6.6% rate usually expects, take the price cut. The buydown is worth most in the scenario you are hoping does not happen.
Sellers, incidentally, prefer buydowns for a reason: they preserve the headline sale price, which supports comparable values in the neighborhood and the seller's own perception of the outcome.
The order to work through
Start with lender competition, since it costs nothing and the dispersion between offers is wide.
Check whether you qualify for a VA loan, which is the strongest structurally cheap option.
Consider term length honestly, based on what payment you can sustain rather than what you can qualify for.
Treat points and buydowns as investments with a break-even, and calculate it before agreeing rather than after.
And weigh a seller-paid buydown against an equivalent price reduction using your own expected holding period, not the monthly payment comparison alone. The underlying reality is that the market prices mortgages roughly efficiently, and no lender is giving away money. When a rate is lower, something else has moved: cash paid upfront, risk transferred to you, a shorter term, insurance premiums, or a higher purchase price. Finding a sub-6% rate is straightforward. Finding one that actually costs less requires knowing which of those you agreed to.