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This is probably a naive question, but I've heard many conflicting answers so I figured it'd be worth asking here.

Let's say I'm looking to buy a house in the US (e.g. worth $500k), and I'm getting a mortgage from a major bank (e.g. Chase), planning to be paid off in 30 years. Will my credit score directly affect quantitatively the mortgage rate I'll be getting. (For instance, something like a +10 credit score will lower my rate by 0.1%). Or is it more the case that after my credit score reaches above a certain threshold (say 700), it will no longer have any influence on the mortgage rate, and other factors will start to play a role.

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    Yes, there is. See Hart CO's answer below for some numbers. Here's another anecdotal example, in the "Interesting Side Note" at the end of this answer.
    – TTT
    Commented Sep 25, 2022 at 4:37
  • "Is it more the case that after my credit score reaches above a certain threshold, it will no longer have any influence on the mortgage rate" is a correct statement. The rate varies with score only below that threshold (and above some other threshold which represents "loan not available at any rate")
    – Ben Voigt
    Commented Sep 26, 2022 at 19:43

1 Answer 1

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Criteria is not consistent between lenders, so it's not some set figure, but aggregated data is available to show the impact that credit score can have.

From myFICO's Loan Savings Calculator:

enter image description here

This is based on thousands of lenders collected daily. Other factors like loan amount and LTV ratio will impact the rate and might change the disparity between rates at different credit scores.

Generally people put credit scores into buckets like the image above, but these are not standard and don't necessarily translate directly to a specific difference in mortgage rates.

For example, a lender that I have worked with breaks scores down into these ranges:

enter image description here

Conventionally 760+ gets you the best mortgage rates, but a lender could choose to offer their lowest rates to people with 800+ or 820+ if they wanted.

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    When I went to a public bank for my first home mortgage ever, I was able to insist on the prime mortgage rate without a well established credit score. (I had one credit card for a year.) I was sinking 50% of my income in mortgage payments but it was high enough that there was no question of I could make the payments. The banks really do like 20% down.
    – Joshua
    Commented Sep 26, 2022 at 16:26
  • @Joshua, that is a good point. Nominally, the interest rate the bank charges is correlated with how they assess the overall risk of the loan. Credit score (which is meant to quantify how reliable you are in paying your debts) is just one factor they use. Making a significant downpayment also reduces the bank's risk, so will often also reduce the interest charged.
    – Seth R
    Commented Sep 26, 2022 at 19:21
  • APR vs. FICO Score table is interesting. I wonder if lenders internally ever use a continuous relationship rather than these intervals. Commented Sep 26, 2022 at 19:34
  • @Joshua Yep, LTV and loan amount are other primary factors that affect rate (DTI is more binary) and that's why I mention them as potentially flavoring the score range to rate relationships because credit score could have less/more impact based on those other factors
    – Hart CO
    Commented Sep 26, 2022 at 20:30

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