ElitePersonalFinance found the Best Mortgage Rates from Banks of December 2025

If you’re looking for Legacy Banks Nationwide reach and a diverse mix of mortgage products, traditional Banks may be right for you. Chase, Bank of America, US Bank, PNC Bank, and Citizens Bank all offer decades of mortgage experience with the latest digital tools, which smaller credit unions may not be able to match.

Whether you’re a first-time home buyer or looking to refinance at mortgage rates at or below the national average, there’s no shortage of excellent programs for new or existing customers.

Why Should You Trust ElitePersonalFinance?

For more than a decade, ElitePersonalFinance has helped millions of people make the right financial decisions, from comparing auto loan options to identifying the best mortgage lenders for their unique Financial profiles. In-depth reviews bringing forth the top recommended Banks based on the best mortgage rates, lending flexibility, customer satisfaction, and a ton of other metrics that cut through the fluff?

Keep reading to learn more about the best mortgage rates for banks, including our top recommended options, different mortgage programs for various credit profiles, and insights on how to improve your credit score to qualify for the lowest possible interest rates. All to prepare you for long-term success in homeownership.

Wells Fargo

If you’re looking for a nice combination of affordable rates, a wide variety of known mortgage programs, and more, look no further than Wells Fargo. Wells Fargo offers several types of mortgages, including traditional FHA, VA, and jumbo loans.

As of October 2025, expect to pay around 6.25% for 30-year fixed-rate mortgages and 5.75% for 15-year fixed-rate mortgages, which is a little below the national averages of 6% and above. Plus, its FHA programs are just as competitive, starting around 5.95% for a 30-year fixed-rate loan.

One of Wells Fargo’s best features is its mobile app, which lets you view your loan progress in real time, upload documents digitally, use the refinancing calculator, and even learn how extra mortgage payments can help you calculate interest savings.

Other mortgage products offered by Wells Fargo have favorable terms, such as no down payment and no private mortgage insurance required for VA loans, with rates as low as 6% for 5/1 adjustable-rate mortgages.

What We Like:

• 6.25% 30-year fixed-rate mortgages
• 5.95% for 30-year fixed FHA Loans
• No down payment and no PMI required for VA loans
• Easy-to-use digital dashboard
• Multiple mortgage types for all borrower profiles

What We Don’t Like:

• Slower than average customer support times
• Sub-620 credit scores pay higher interest rates than specialty lenders
• Select loans may include monthly maintenance fees
• Limited promotional rate discounts
• Strict verification requirements

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Wells Fargo website

Terms: Wells Fargo is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, VA, and jumbo options. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Citibank Mortgage

Citibank Mortgage is another strong contender. It offers 30-year fixed-rate mortgages at 5.625%, which is below the national average of 6.3%.

Plus, promotional offers cycle throughout the year. As of this writing, Citibank is offering $500 off closing costs (by providing a numerical code to a representative) and special pricing for Citi customers with eligible balances.

If you have less-than-perfect credit, Citibank can assist with 30-year FHA loans with a 5.625% rate. They sell deals for qualified buyers with credit scores as low as 580 who are looking for a lower down payment. In addition, VA loans will be available to active-duty and retired military personnel with no private mortgage insurance (PMI) required.

Lastly, let’s not overlook Citibank’s all-around performance with strong J.D. Power 2024 US Mortgage Origination Satisfaction Study performance and Zillow scores (4.84 out of 5 Star average rating based on 4000+ reviews), as of October 2025.

What We Like:

• Competitive mortgage rate
•  Different types of mortgages available, e.g., conventional, FHA, and VA loans
• Longstanding reputation
• 4.84 out of 5 stars average rating based on 4000+ Zillow reviews
• Ability to search MLS listings using HomeStory
• Strong J.D. Power 2024 US Mortgage Origination Satisfaction Study performance

What We Don’t Like:

• Physical branch availability & customer service quality vary by region
• Strict FHA and VA loan program requirements
• Not the most adjustable rate mortgage options
• Non-Citi customers may face longer processing times
• Customer service quality varies by region

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Citibank portal

Terms: Citibank Mortgage is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, VA, and jumbo options. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Flagstar Bank

Flagstar Bank consistently ranks high, offering 5.5% 30-year fixed-rate mortgages, which is below the 6.3% national average as of October 2025. It also provides FHA programs for borrowers with credit scores as low as 580, who can qualify for a 3.5% down payment. Also on the table: VA loans with no private mortgage insurance requirement —an excellent choice for veterans and active-duty personnel who want to purchase their first or subsequent home.

One of the best things about Flagstar Bank is that it offers ongoing promotions, such as cutting closing costs or rate discounts, as long as you’re an existing customer with a minimum threshold balance. Plus, it has robust online tools that let you get personalized rate quotes, offering the best hybrid approach of in-person support and digital banking.

Lastly, Flagstar Bank has numerous accolades, including solid J.D. Power’s 2024 US Mortgage Origination Satisfaction Study scores and a FinTech Breakthrough 2025 award, demonstrating its commitment to providing the best technology for mortgage services.

What We Like:

• Variety of loans available, e.g., FHA and VA loans
• Below the national average mortgage rates
• Excellent J.D. Power 2024 satisfaction scores
• Solid online Financial tools
• Consistent promotional rate discounts

What We Don’t Like:

• Limited Branch availability depending on the region
• Higher-than-average adjustable-rate mortgage rates
• Promotional offers are not available all season
• The level of customer service varies by region
• Differences in underwriting Times by region

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Flagstar Bank website

Terms: Flagstar Bank is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, and USDA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Chase

A longstanding banking institution in the United States, Chase is a well-rounded workhorse for first-time home buyers and refinances, offering 30-year fixed rates below the 6.3% national average at 5.625%. FHA Loans are also available for credit scores as low as 580, with rates starting at 5.625%

Like Flagstar Bank, Chase also runs regular offers, such as rate discounts for existing customers, and an excellent online platform that lets you access personalized quotes based on your financial profile and track your mortgage application in real time.

Secondarily, Chase is recognized in the industry, having won the J.D. Power 2024 US Mortgage Origination Satisfaction Study and the Mortgage Technology Awards 2025 accolades.

What We Like:

• Below the national average mortgage rates
• FHA loans and VA loans are available
• High J.D. Power 2024 US Mortgage Origination Satisfaction Study scores
• Winner of Mortgage Technology Awards 2025
• Excellent online tools for approval and tracking

What We Don’t Like:

• Not the easiest to qualify for the FHA and VA loan programs
• High refinance origination fees
• Limited Regional promotions
• The level of customer service varies by region
• Slower underwriting process for complex cases

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Chase website

Terms: Chase is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, and USDA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Bank of America

Another major player in the mortgage space is Bank of America.
The company offers 30-year fixed-rate mortgages starting at 5.625%, along with FHA, VA, and its highly regarded Community Affordable Loan Solution. This solution considers alternative eligibility criteria beyond traditional credit scores, like rent and utility payment history, giving first-time home buyers with lower credit scores an advantage.

One of our favorite things about Bank of America is its user-friendly online mortgage portal, which lets you upload documents electronically and track your mortgage or refinance process in real time. As long as you have an eligible checking account, Bank of America customers can also receive closing cost credit or lower interest rates.

In terms of rewards, Bank of America is recognized in the J.D. Power 2024 US Mortgage Origination Satisfaction Study and in Mortgage Executive Magazine’s 2025 Best Customer Experience, both of which highlight its exceptional customer service.

What We Like:

• Competitive fixed-rate mortgage rates
• Community Affordable Loan Solution for Less qualified buyers
• regular promotional rate and closing cost offers
• High J.D. Power 2024 US Mortgage Origination Satisfaction Study scores
• Winner of Mortgage Executive Magazine’s 2025 Best Customer Experience

What We Don’t Like:

• Not the widest Branch availability
• Strict FHA loan and VA loan requirements
• Lower processing times than usual for refinance
• Not all bank accounts qualify for specific incentives
• Peak-hour slowdowns using the online portal

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Bank of America website

Terms: Bank of America is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, and VA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

US Bank

Another nationally recognized lender, US Bank, offers a diverse mix of mortgage programs, including FHA, VA, and jumbo loans, working with competitive 30-year fixed mortgage rates below the 6.3% national average.

One key advantage of US Bank is its Rate Lock Plus. This program allows Borrowers to lock rates for up to 90 days while continuing to search for homes and keeping them protected from rising interest rates. Thanks to its rigorous attention to detail, US Bank has earned several Awards and recognition, including high J.D. Power 2024 US Mortgage Servicing Satisfaction Study scores and favorable feedback from leading online Publications like Bankrate.

We’re also big fans of US Bank’s online tools, including mortgage calculators and educational resources for first-time home buyers that explain the process in great detail.

What We Like:

• 30-year fixed mortgage starts at 5.75%
• Adjustable-rate mortgages start at 5.25%
• The FHA program is available for scores as low as 580
• Rate Lock Plus locks in rates for up to 90 days
• high J.D. Power 2024 US Mortgage Servicing Satisfaction Study scores

What We Don’t Like:

• Limited Branch availability depending on the region
• Higher initial adjustment caps for some adjustable-rate mortgages
• Customer service quality varies by region
• Not the most robust digital tools
• Self-employed individuals may face longer refinance approvals

Eligibility & Next Steps:

• 18 years of age or older
•  US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the US Bank website

Terms: US Bank is a direct mortgage lender offering a wide range of home loans, including conventional, FHA, VA, and jumbo loans. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

PNC Bank

Another major player in specialized mortgage programs is PNC Bank, which offers 30-year fixed refinance rates starting at roughly 5.7% (as low as 5.1% for 15-year terms).

If you want to qualify based on non-traditional credit metrics, then the PNC Banks Community Lending Solutions program can work very well. I allow you to qualify based on the strength of rent or utility payments, on-time payments, and other non-credit score-related criteria, offering a second chance for first-time home buyers.

Plus, we’re big fans of the PNC Bank’s Home Insight dashboard, which features real-time application tracking in an easy-to-use, intuitive online interface, along with a variety of online calculators to determine monthly payments.

On the awards end, PNC Bank also shines with consistently High J.D. Power 2025 Mortgage Servicer Satisfaction Study scores.

What We Like:

• Excellent 30-year and 15-year refinance rates
• Alternative credit scoring through the Community Lending Solutions program
• High J.D. Power 2025 Mortgage Servicer Satisfaction Study scores
• Easy-to-use Home Insight online tools
• Transparent digital process

What We Don’t Like:

• Higher origination fees depending on the refinance program
• Not widely available branch support and smaller regions
• Extended processing times for VA eligibility
• ARMs or jumbo loans are not available in all regions
• Application Times May Vary based on property type

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the PNC Bank website

Terms: PNC Bank is a direct mortgage lender offering a wide range of home loans, including fixed-rate, adjustable-rate, FHA, and VA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Citizens Bank

Another highly reputable Bank, Citizens Bank, offers a wide variety of mortgage and refinance products. Expect to pay in the mid-6% range for 30-year fixed mortgages, depending on your credit score and the amount of Equity built in your home if you’re refinancing.

Thanks to a strong performance, Citizens Bank has earned the Fannie Mae STAR Performer Award, a strong Testament to its servicing and borrower support. Plus, it offers low-balance payment options as low as 3%, a good choice for first-time home buyers who cannot meet the traditional 20% down payment requirement. Plus, they’re willing to accept alternative scoring factors, such as rental payment history, if you have less-than-ideal credit scores.

All in all, Citizens Bank offers competitive mortgage rates below the national average, strong recognition by Fannie Mae, and low down payment options for credit-challenged borrowers.

What We Like:

• Mortgage rates below the national average
• Winner of the Fannie Mae STAR Performer Award
• Excellent hybrid in-person and Digital support
• Fully transparent rate and loan information is published on the website
• Non-traditional scoring accepted, e.g., Rental payments

What We Don’t Like:

• Not too many loan options for credit scores below 620
• Loan eligibility depends on the region
• Fewer refinance programs than Chase and Wells Fargo
• Subprime applicants can expect to pay higher closing costs and origination fees
• Slower application processing than online lenders

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Citizens Bank website

Terms: Citizens Bank is a direct mortgage lender offering a wide range of home loans, including fixed-rate, adjustable-rate, FHA, and VA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

NBKC Bank

If you’re looking to work with a top-notch digital-first bank, then NBKC Bank is a viable option. Several mortgage products are available, including but not limited to Conventional, FHA, and VA loans. Mortgage rates typically range from 6.25% to 6.75% APR, with a focus on borrowers with bad credit, thanks to its flexible underwriting processes and lower-than-average fees.

Thanks to NBKC’s strong work, it has numerous Awards, including Forbes Advisor’s 2023 Best Online Lender Award, which really speaks to exceptional service quality.

Plus, with its Nationwide reach and fully digital platform, it’s all about helping borrowers make one of the most important decisions they’ll ever make.

What We Like:

• Variety of loan types, e.g., conventional, FHA, and VA loans
• Winner of Forbes Advisor’s 2023 Best Online Lender Award
• Excellent fee structure
• Fully digital platform for Nationwide reach
• Quick pre-qualification through the NBKC Bank website

What We Don’t Like:

• Limited branch availability in the Midwest
• Less focus on untraditional credit than competing lenders
• USDA loans and jumbo loans are not available
• Traditional borrowers may not like the digital-only model
• Less competitive adjustable-rate mortgages versus competitors

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the NBKC Bank website

Terms: NBKC Bank is a direct mortgage lender offering a wide range of home loans, including fixed-rate, FHA, VA, and refinance. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

Ocean Bank

If you’re looking for personal service and locally competitive rates, Ocean Bank is highly recommended. I tried to secure a loan at nearly 6.5% APR for a 30-year fixed mortgage and refinance, which is below the national average. Plus, Ocean Bank has a strong Community focus, with dedicated loan advisors guiding you every step of the way, so that people with less-than-stellar credit can have a chance to succeed.

Additionally, Ocean Bank has received numerous awards, including being named Top Community Bank by the South Florida Business Journal in 2020, demonstrating its commitment to Regional Lending.

All in all, if you’re looking for more personalized guidance, especially if you have credit scores in the low to mid 600s, then Ocean Bank is an excellent choice.

What We Like:

• Rates below the national average (~6.5% APR)
• Awarded “Top Community Bank” by South Florida Business Journal 2024
• Hybrid of digital and Branch service
• Personalized support for subprime Borrowers
• Stronger Community focuses on lending programs than average

What We Don’t Like:

• Primarily based in Florida
• Not the most robust bad credit refinance or FHA programs
• Slower processing times than many online lenders
• Rate transparency is lower than that of our other recommended lenders
• Smaller digital presence than competitors

Eligibility & Next Steps:

• 18 years of age or older
• US citizen or permanent resident
• Valid Social Security number
• Proof of income and employment history
• Pre-approval documents, e.g., credit score and bank statements
• Apply online through the Ocean Bank website

Terms: Ocean Bank is a direct mortgage lender offering a wide range of home loans, including fixed-rate, FHA, and VA. It reviews your credit history, income, assets, and debt-to-income ratio before assigning you a mortgage. Rates, terms, and loan amounts may change without notice and can vary based on credit score, property value, and loan type. Additional fees such as closing costs or mortgage insurance may apply, depending on your down payment and the type of loan. Always read your official loan estimate before signing the contract.

What Mortgage Rates Can I Expect From Banks?

As of this writing, expect 30-year fixed mortgages to fall in the 6.3% to 6.8% territory. For example, US Bank is currently showing a 6.375% 30-year fixed conventional loan rate for qualified Borrowers.

When determining the rates you’ll be offered, Banks typically consider a variety of factors, such as your credit score and credit history, the loan amount relative to your home’s loan-to-value ratio, your debt-to-income ratio, and the type of loan you’re taking out (e.g., FHA or VA).

Suppose you’re looking for mortgage rates to move below the low-to-mid 6% range. In that case, several factors must come into place, such as reduced inflation or deflation risk, weakening economic data, and changes to monetary policy, including Federal Reserve rate cuts. Plus, there’s always the topic of greater investor demand for mortgage-backed securities.

Note, rates are not always guaranteed to drop. For example, bond yields could rise, driving mortgage rates upwards. Even short-term Federal Reserve rate cuts can increase mortgage rates and, in turn, boost demand for housing supply.

The low to mid 6% rate should serve as a benchmark for evaluating your personal offer. If your rate is much higher than you can negotiate with your lender and reconcile with your credit profile, and ongoing market conditions. Keep in mind that you will be expected to pay 7% or more if you have less than perfect credit.

What are the Pros and Cons of Getting a Mortgage from a Bank?

Here are the pros and cons of getting a bank mortgage:

Pros

Variety of Loan Programs

One of the best things about Bank mortgages is the wide variety of loan products available. All of the major players like Chase, Bank of America, US Bank, PNC Bank, and Citizens Bank offer several mortgage products, including but not limited to fixed rate, adjustable rate, FHA, VA, and jumbo loans, which are suitable for everyone from strong credit score earners to first-time home buyers.

Plus, they’re more likely than Credit Unions to offer several perks like down payment assistance and APR promotions. Thanks to extensive networks and vast resources, they can deliver benefits that smaller lenders cannot, including customized loan terms.

Excellent Digital Tools

With automated underwriting, it’s never been easier to take out a mortgage. Platforms like Rocket Mortgage (by Quicken Loans) and Bank of America’s Digital Mortgage Experience allow you to do everything from tracking your mortgage in real time to closing it out by electronically signing all documents for truly transparent processing.

Plus, you can receive instant notifications and speak directly with an advisor without needing to make an in-person Branch visit.

Nationwide Coverage

Unlike Credit Unions that often have a regional focus, banks are nationwide, allowing consistent underwriting standards no matter where you are. It is a special use if you’re looking to relocate to another state. Whether you’re applying in Colorado or Alabama, the process at large Banks like Wells Fargo and Bank of America will remain the same for consistency.

At the same time, banks across the country have dedicated loan officers who understand local market conditions, allowing them to scale while staying true to their regions.

Special Incentives

Do you have a checking, savings, or investment account with any of our recommended Banks? If so, you can qualify for mortgage rate and fee discounts. For example, Bank of America’s Preferred Rewards allows borrowers to shave off 0.375% off of their interest rate, while others like PNC Bank offer closing credits, as long as you meet an account balance threshold.

Over the long term, these loyalty programs can significantly impact your monthly budget, making it even easier to manage homeownership.

Cons

Requires Good Credit

One drawback of Bank mortgages is the strict credit and income requirements. Don’t expect any flexibility if you have a credit score below 640 or irregular income, are freelancers, or self-employed. Plus, Banks tend to favor applicants with long credit histories and higher FICO scores when using their automated systems, which leaves little room for error.

If you have suffered a past Financial setback, it’s doubtful you qualify for a bank mortgage. In this case, consider credit unions or smaller fintech lenders that use your non-traditional payment history, such as on-time rent and Utility payments (as well as other non-credit-scoring criteria) to qualify.

Higher Fees

Unfortunately, high origination and processing fees are very popular with banks. Plus, several other fees may apply, such as Document Preparation and application submission. All of these costs can quickly add up, especially for first-time home buyers who do not have much cash in the Bank.

If your bank interest rate looks good, note that additional fees could cut into your long-term savings. Always look for fee waivers, especially if you have larger deposits as an existing customer.

Slower Customer Support

A third downside of Bank mortgages is slower customer support response times. Oftentimes, customer service varies by region, and there are occasional long wait times. Plus, servicing could be outsourced to another company once your loan is approved, meaning you’ll be switching Representatives here and there.

When it comes to making precise, detailed changes to your account —such as escrow adjustments or payment disputes —it can bog down your process.

Not as Much Focus on Community

Expect limited Community engagement with banks. Unlike credit unions, they do not offer hyper-local homebuyer programs focused on regions or neighborhoods. Are you looking for financial education? Banks are also less likely to provide it. No wonder there’s a big difference between profit-driven and member-driven organizations.

How to Get a Mortgage from a Bank with Bad Credit

If your credit score is below 640, it may be challenging to qualify for a Traditional Bank mortgage. However, don’t fret – ElitePersonalFinance is here to assist you in understanding how Banks evaluate borrowers, tons of options available, and how to prepare for any application.

Here’s a detailed step-by-step guide on how to get a bank mortgage with bad credit:

Research Your Options

Remember that there are different mortgages for different needs. For example, fixed-rate mortgages allow you to pay the same interest rate for the entire loan term, usually between 15 and 30 years. In turn, adjustable-rate mortgages offer a lower initial rate that adjusts after a specific period.

Let’s not forget FHA, VA, and USDA loans, which are government-backed programs that offer additional incentives such as lower down payments, relaxed appraisal requirements, and more flexible credit requirements.

Lately, there’s always the opportunity for Jumbo loans for high-value properties that traditional mortgages don’t cover.

Most of our top recommendations, such as Chase, Wells Fargo, and US Bank, offer special incentives for existing customers, so it’s essential to take advantage of them as well.

Get Prequalified

Once you’ve identified a lender to work with, the next step is to be prequalified. Pre-qualifications are offered by Banks, which comprise informal estimates of how much you can borrow.

During this process, the Bank will review your complete Financial profile, including your income, credit, and outstanding debts. In terms of what to provide, expect to share pay stubs, tax returns, recent bank statements, and proof of employment, as well as all outstanding loan details.

Remember, pre-approval strengthens your buying position, so gather documentation as early as possible to speed up processing.

Compare Interest Rates and Terms

Once you’re prequalified, the next step is to compare multiple mortgage offers from at least three banks. Even a slight rate difference could save you thousands of dollars over the life of the loan.

Specifically, every offer should be assessed based on the interest rate, APR, loan term, and any applicable fees, such as origination and closing. Plus, you should also consider discount points or lender credits.

During this process, compare both a nice mix of national lenders and Regional Banks, which may often provide more competitive rates, especially for local buyers.

Gather and Submit Documentation

After you select a lender, the next step is to complete a mortgage application by providing documents such as your government-issued ID, 2 years’ worth of tax returns, and recent pay stubs. Plus, you’ll also be expected to provide at least two to three months of bank statements as well as all asset and depth details.

Fortunately, most of our banks offer robust digital tools that let you upload everything online, e.g., Bank of America’s Digital Mortgage Experience.

Be sure to respond quickly to all Bank requests that require additional verification steps. Remember that digital applications are usually faster than in-person ones.

Underwriting and Appraisal

After you apply for a mortgage, the Bank begins the underwriting process, during which all financials are verified. This includes ordering a home appraisal to confirm your property’s value and ensuring it’s consistent with comparable properties in the area.

During this time, you should remain available to answer questions or requests for additional documentation. You should also avoid applying for new credit or making large purchases, as both can damage your credit score. Be sure to review your own estimate for any changes.

If the purchase price exceeds the appraisal value, you will likely need to renegotiate or make a larger down payment to offset the difference.

Review and Close on Loan

Once the Bank’s underwriting process is done, it will issue a Closing Disclosure, an accurate document that details your final rates and fees, all associated costs, and the payment schedule. Be sure to speak with a dedicated loan officer for the fine details.

At closing, you’ll be expected to sign off on all documents, pay closing costs, and receive the keys to your new property as soon as funds are dispersed.

Expect this process to take anywhere from 30 to 45 days.

Manage Your Mortgage Smartly

Lastly, you should do everything in your power to manage your loan responsibly, using best practices such as setting up automatic payments to avoid late fees, paying more towards the principal each month, and refinancing if rates go down. Plus, you should continually monitor your escrow and file your taxes annually to make sure nothing’s out of whack.

In short, getting a bank mortgage can feel like a complex process, but our step-by-step guide distills it into clear steps to make it even easier to understand. It’s all about understanding where you stand financially, researching at least three competitive Banks, and comparing offers before signing on.

How to Improve Your Chances of Getting Approved for a Mortgage from a Bank with Bad Credit

Here’s a step-by-step guide on how to improve your chances of getting approved for a bank mortgage with bad credit:

Understand Your Credit Score

The first step to getting a bank mortgage with bad credit is to understand your credit score. Check your credit reports from Experian, Equifax, and TransUnion at annualcreditreport.com, and carefully review them for errors such as incorrect balances or payments marked as late that should not be.

If you find any inaccuracies, it’s essential to file a dispute with the credit bureau in question. Even a simple disagreement can bump up your score by as much as 40 points, allowing you to qualify for a better rate. Remember, try to keep your utilization below 30%.

Understand Bank’s Perspective

As part of any Bank underwriting, several factors come into play, including your credit score, debt-to-income ratio, loan-to-value ratio, employment history, and any savings or assets. At a baseline, you should have a credit score of 620 to 640 with a debt-to-income ratio under 43%. Plus, the less you borrow relative to your home’s value, the better off you’ll be.

That’s for employment, you should aim for a steady 2-year record with several months’ worth of cash reserves or Investments to back up your mortgage.

By understanding these benchmarks, you’ll better understand how to qualify.

Improve Your Financial Profile and Credit Report

If you have a less-than-perfect credit score, you can compensate by building Equity or saving for a larger down payment. You can also work to pay down small debts and show increased employment stability by providing at least two years of tax returns with study earnings.

Sometimes it may make sense to add a co-borrower to your account with stronger credit to increase the chances of approval.

Additionally, you want to do everything you can to improve your credit score/ focus on rebuilding by paying every bill on time from here on forward, as payment history accounts for 35% of your FICO score. Try to bring your credit utilization below 30% of your credit limit and diversify your credit cards as much as possible, including auto loans, mortgages, and other types of credit, rather than just credit cards.

If you have enough time before your next mortgage, we recommend taking up to 12 months to rebuild your credit, which should be enough time for lenders to notice favorable patterns.

Save for a Larger Down Payment

The larger your down payment, the less you are at risk of a restaurant. As a general rule, try to put down at least 20% towards a down payment, which can compensate for a weak credit score.

At the same time, a larger down payment improves your loan-to-value ratio, one of the significant factors that goes into the underwriting. The lower your loan-to-value ratio, the more likely your bank is to approve your mortgage at a better interest rate.

Reduce Your Debt-to-Income Ratio

Another critical aspect of elevating your financial profile is to reduce your debt-to-income ratio. At the very least, aim for a DTI below 43%; 35% or less is better.

One of the best ways to do it is to pay off the smallest, highest-interest debt first. Consider a balance transfer card with 0% introductory APR to focus on paying only the principal, rather than the monthly interest, on your credit cards. Plus, we encourage you to avoid taking out new credit cards or making larger purchases.

Add a Co-Borrower

If your credit score is keeping you down, enlist the help of a credit counselor or work on building a stronger credit score. This person can be a spouse, friend, or close relative. Note: co-borrowers automatically assume joint liability, so if you miss a payment, both credit scores will be affected.

As a best practice, try to enlist someone with a credit score above 700 and a stable income.

How Much You’ll Pay on a Mortgage  from a Bank with Bad Credit

If you have bad credit, then you should expect higher interest rates.

For example, if the 30-year fixed-rate mortgage sits around 6.5% now, you can expect to pay closer to 7.5-8.25% with a credit score between 620 and 639, depending on the lender and loan type. That easily equates to hundreds of dollars extra in monthly payments toward principal and interest.

If you put more towards a down payment, you may get better terms from the lender. You may compensate in another area, such as stable employment or high savings. Always be sure to allow banks to review your entire Financial profile, not just your credit.

How to Improve Your Credit Score

If you want the best mortgage rates, we highly recommend looking into your credit score. Remember that the higher your credit score, the lower your rate will be.

For perspective, if you have a 760 credit score, you can take advantage of rates as low as 5.6% from Wells Fargo, compared to 7.2% or higher with a 620 score, resulting in tens of thousands of dollars lost over the life of the loan.

Here are some strategies on how to improve your credit score:

Understand Calculations

One of the first steps towards improving your credit score is to understand how it’s calculated. FICO, the model major banks use, ranges from 300 to 850 and is based on payment history, credit utilization, length of credit history, and whether credit makes new credit inquiries.

• Payment History (35%)
• Credit Utilization (30%)
• Length of Credit History (15%)
• Credit Mix (10%)
• New Credit Inquiries (10%)

Check Credit Report for Errors

According to the Consumer Financial Protection Bureau (CFPB), one in five Americans sees errors on their credit reports. Even a simple error can shave off 20 points from your record, or cost you thousands in unnecessary interest.

Be sure to check your Equifax, Experian, and TransUnion reports and thoroughly review all errors, including accounts that aren’t yours, incorrect payments, and outdated information.

If you find an error, be sure to file it with the bureau in question. With a 30-day late payment dropping your score by as much as 90 points, it makes perfect sense to check for errors.

Make On-Time Payments

With 35% of your FICO scores that consist of an on-time payment history, remember that one missed payment can remain on your record for up to 7 years. That’s why we highly recommend automating payments or using your Bank’s dashboard.

For example, Wells Fargo’s mobile app and Chase’s online portal show you how to set up automatic payments so that you never miss a due date. If you’re on time with payments over the course of a year, then you can watch your score improve by as much as 100 points, depending on your past credit history.

Lower Your Credit Utilization Ratio

As a general rule, your credit utilization ratio should be no more than 30%. For example, if you have a $5,000 credit limit and a $4,000 balance, that’s an 80% utilization rate, which can bring your score down. By paying off $2,500, you can raise your ratio and boost your score by as much as 20 points in a single month.

Banks like Citibank and US Bank carefully weigh utilization when assessing mortgages, signaling that you can manage your future mortgage or refinance responsibly.

Consider Professional Credit Repair Services

Suppose you have blemishes on your credit record, such as collection activity or a few late payments. In that case, it may make sense to work with a professional credit repair service before taking out a mortgage. Legit firms like Credit Saint let you dispute successfully with the three credit bureaus — Equifax, Experian, and TransUnion — complete with personalized action plans that cover everything from diversifying your credit mix to maintaining a healthy utilization ratio.

Note, working with credit repair companies does not guarantee results. However, if you have a mild improvement of 20 points, it can make all the difference, saving hundreds of dollars on mortgage payments every month.

Don’t Open Too Many Accounts

One way to bring your credit score down quickly is by opening too many new accounts in a short time frame, as each new account will trigger a hard inquiry into your credit.

Suppose you’re planning to apply for a mortgage at Bank of America or PNC Bank. In that case, we highly recommend avoiding any new lines of credit several months before submitting your mortgage application. Refinancing for a mortgage doesn’t work the same, as multiple mortgage inquiries within a 45-day window count as a single one, so you should be okay comparing rates between various banks without affecting your score.

Mix Up Your Credit

Having several different types of credit on your record demonstrates to lenders like NBKC Bank and Ocean Bank that you can manage them responsibly. If you only have credit cards, then it doesn’t have the same effect. Even a simple loan of $1,000 with on-time monthly payments can improve your credit score in as little as 3 months.

Pay Down Past Due Accounts

Lenders hate Collections and charge-offs. Be sure to settle them to improve your likelihood of approval. Also, some banks are more lenient than others when it comes to resolved collections accounts, especially if you have a consistent payment history for the last year.

After you pay off collection activity, we recommend waiting 60 to 90 days before applying for a mortgage or mortgage refinance.

All in all, making on-time payments, lowering your credit utilization ratio, not opening too many accounts, diversifying your credit, and paying down past due accounts are all ways you can improve your credit score quickly before your next Bank mortgage or refinance.

How We Picked These Lenders

In evaluating these lenders for this Best Mortgage Rates for Banks guide, we based our selection on several criteria, including but not limited to customer support, reputation/third-party reviews, and competitive interest rates.

Here’s a closer look:

Strong Interest Rates and Programs

We prioritize lenders that offer rates below the national average of 6.3%. For example, Citibank and Bank of America both offer 30-year fixed mortgages starting at 5.625%, which is below the 6.3% national average.

In turn, our topics are suitable for several types of mortgage programs that accommodate all Financial profiles, e.g., conventional, FHA, VA, and USDA. Want a good example of Citibank, which offers FHA loans for borrowers with credit scores as low as 580, along with lower down payment requirements, along with Bank of America’s Community Affordable Loan Solution, which uses alternative eligibility criteria outside of traditional credit scoring, like on-time rent and Utility payments.

Remember, it’s not all about rate competitiveness but program flexibility.

Reputation & Third Party Reviews

Another key scoring criterion in evaluating these lenders is reputation and third-party reviews. Several sources were considered, including independent third-party reviews from Trustpilot, respected Awards, and Industry rankings.

All of our recommendations shine. For example, Citibank consistently ranks high in the J.D. Power US Mortgage Origination Satisfaction Study, with an average of 4.84 out of 5 stars on Zillow. In turn, Bank of America has been recognized by Mortgage Executive Magazine for Best Customer Experience in 2025, and US Bank has been added to Forbes’ Best-In-State Mortgage Lender list, which we find highly impressive.

We’re also big fans of how these Banks disclose their fee rates and eligibility criteria to inspire more confidence in every borrower, whether they are first-time homeowners, have less-than-perfect credit, or are in between.

Customer Support

All of our recommended banks have multiple ways to get in touch, including email, phone, live chat, and in-person service. All of them have a dedicated mortgage specialist who guides you every step of the way from approval to closing, along with intuitive mobile apps that provide real-time loan status updates. Let’s not forget the personalized refinance calculator, which lets you enter numbers to determine your Breakeven point and decide whether a refinance is worth it.

Loan Origination and Closing Fees

With origination and closing fees cutting into your savings, we prioritize banks by offering several waiver programs. For example, Citibank offers qualified Borrowers $500 off closing costs, whereas Bank of America assists first-time home buyers with promotional waivers. Other Banks can also reduce origination fees depending on the program. We’re all about helping lenders minimize up-front costs so that you can save thousands of dollars while keeping an interest rate below the national average.

Tools

No mortgage process comes complete without tools to assist. All of our recommended options offer highly intuitive online dashboards that allow you to submit documents electronically and track loan progress.

Frequently Asked Questions

Do banks offer better mortgage rates than credit unions?

It’s hit-or-miss when comparing banks to credit unions. Larger banks have greater capacity to offer special promotions or rate discounts, whereas Credit Unions focus on distributing savings to borrowers thanks to their nonprofit status and community-based approach.

Always remember that your actual rate depends on several factors, such as your credit score and down payment. That’s why we highly recommend that you shop around.

How can I qualify for a lower bank mortgage rate?

You can take advantage of lower Bank mortgage rates if you have a strong credit history and a stable income with a low debt-to-income ratio. Lower lender Risk by making a larger down payment or opting for a 15-year fixed mortgage, which typically has lower rates than a 30-year term. Don’t forget about automatic payment discounts or existing customer benefits that may be on offer.

Do large banks have more loan options than local lenders?

Banks are well-suited to offer a full range of loan products tailored to local market conditions, including conventional, FHA, VA, USDA, and jumbo loans. Typically stronger with refinance and specialized programs like adjustable rate mortgages, so if you’re looking for flexibility, large banks are preferred over local lenders.

Can I negotiate my mortgage rate with a bank?

Yes, it is possible to negotiate your mortgage rate with your Bank, especially with larger Banks like Chase or Wells Fargo. Plus, they can offer incentives such as rate discounts or lower fees, so we encourage you to get pre-approval offers from at least three banks to negotiate effectively.

Do banks offer special refinance programs?

Yes, banks are known for offering special refinance programs across several types, including cash-out, rate-and-term, and FHA. Existing customers could also take advantage of promotional rates, while others could reduce their mortgage insurance or extend their loan terms, depending on the program.

Is it faster to get approved for a mortgage through a bank?

Every lender has their own approval speed. However, larger banks are known for quick online pre-approval processes, with underwriting taking days rather than weeks. Keep in mind that they’re typically stricter about documentation and verification, so they move more slowly than local lenders. However, this shouldn’t be a problem if your Bank already has your financial history ready.

Do banks offer jumbo or specialized home loans?

If you have a high-value property, many banks can offer jumbo loans that exceed traditional loan limits. Plus, they offer specialized home loans focused on Renovations, green energy, or first-time home buyers, though the latter may require a higher credit score and income. Always expect more specialized Home Loans from Banks than from smaller lenders.

How much does my down payment affect my bank rate?

The larger your down payment, the lower the Bank’s lending risk, which, in turn, affects your mortgage interest rate. For example, if you put down at least a 20% down payment, then you can avoid private mortgage insurance. Plus, you can take advantage of tiered rate discounts based on your down payment amount.

What fees should I expect with a bank mortgage?

Several fees are included in bank mortgages, including origination, application, and closing fees. You may also pay separately for appraisal fees and titling fees. Let’s not forget about private mortgage insurance if your down payment is 20% or less. That’s why we recommended comparing APRs across lenders and requesting Loan Estimates to better understand the fees you can expect.

Conclusion

Finding the best mortgage rates from major banks comes down to improving your credit, comparison shopping across multiple lender programs, and taking advantage of relationship-based perks and other unique benefits. While big banks like Chase, Bank of America, Wells Fargo, U.S. Bank, PNC, and others offer competitive rates and a wide variety of loan options, expect stricter qualification criteria compared to credit unions or online lenders. Be sure to review your offers carefully to maximize your chances of securing a mortgage you’re truly comfortable with.