"Do first time buyers get a better rate?" is one of the first questions I hear across the desk, usually right after someone sees an ad promising a special first time buyer rate. This post is part of our Arizona first time home buyer guide, and it gives you the honest answer: where a real pricing break exists, who gets it, and what moves your number far more than your buyer status.

For context, Freddie Mac's Primary Mortgage Market Survey put the average 30 year fixed rate at 7.24% for the week of October 29, 2026, down from 7.32% the week before. Every rate I talk about below starts from a market like that one.

Do first time buyers get lower mortgage rates?

Not just for being first time buyers. A lender's rate sheet does not have a line that says "never owned a home, take a quarter point off." Your rate is priced off risk and the loan program, and first time status is not a risk factor by itself.

What first time status can do is make you eligible for programs and fee waivers that change your cost. That is a real difference, but it is narrower than the ads suggest. If you are not sure you count as a first time buyer in the first place, start with who counts as a first time home buyer in Arizona.

The first time buyer fee waiver that is real

The real break is a waiver of upfront pricing fees on conventional loans, and it is tied to your income. On October 24, 2022, FHFA announced it was eliminating upfront fees on Fannie Mae and Freddie Mac loans for first time homebuyers at or below 100% of area median income in most of the country and below 120% of area median income in high cost areas. The same announcement covered HomeReady and Home Possible loans and loans supporting the Duty to Serve program.

Those upfront fees are what Fannie Mae calls loan level price adjustments and Freddie Mac calls credit fees. They are charged based on things like credit score and loan to value. Your lender does not usually send you a separate bill for them. They get built into the rate you are quoted or show up as a cost at closing. When they are waived, that cost goes away.

FHFA news release, Targeted Pricing Changes to Enterprise Pricing Framework, checked November 2, 2026.

Is it still in place in 2026? Yes. Fannie Mae's April 15, 2026 Selling Notice describes how it determines area median income eligibility for loan level price adjustment waivers on HomeReady, first time homebuyer and Duty to Serve loans, and says that for loans run through its Desktop Underwriter system, the casefile creation date will be used for that test on loans with a casefile created on or after January 15, 2027. On the Freddie Mac side, its Seller Guide Exhibit 19 lists a credit fee cap for first time homebuyer mortgages, with eligibility criteria in Exhibit 19A.

The area median income figure changes by location and by year, so I check it for the specific address when I price a file rather than quoting one number for all of Arizona.

How first time buyer pricing works by loan type

The fee waiver is a conventional loan rule. FHA, VA and USDA are separate government programs and are not part of FHFA's announcement, so being a first time buyer does not change their pricing in the same way.

Conventional, 3% down

This is where the waiver lives. Fannie Mae's HomeReady comparison lists a 3% required down payment, and Freddie Mac describes Home Possible as a 3% down option with a total qualifying income limit of 80% of area median income. FHFA's 2022 change eliminated upfront fees on both products. A strong credit score on a conventional loan can also let you drop mortgage insurance later. The CFPB explains you can ask to cancel PMI when your balance is scheduled to reach 80% of the original value of your home, and it generally ends automatically at 78%. See our conventional loans page.

FHA, 3.5% down

HUD says your FHA down payment can be as low as 3.5% of the purchase price. FHA's appeal for first time buyers is access, not a first time discount. It is more forgiving on credit, which can make it the cheaper loan for a buyer with a lower score even when the quoted rate looks similar. Our FHA loans in Arizona page covers the details.

VA, 0% down

VA says lenders offer competitive interest rates on VA backed purchase loans, and that the loan can help you buy a home especially if you do not want to make a down payment. If you served, price VA before anything else.

The right answer often comes down to the mortgage insurance line, not the rate. I walk through that comparison in FHA vs conventional loans in Arizona.

What actually moves a first time buyer's rate

Your credit score and your down payment move your rate more than anything else you control. The CFPB says higher scores reflect a better credit history and make you eligible for lower interest rates, and that most mortgage lenders use the middle of your three scores to decide the rate they offer.

The CFPB's own rate tool shows how wide the spread can be. Using data from April 1, 2025, with 10% down on a conventional 30 year fixed loan, it showed offers ranging from 6.125% to 8.875% at a 625 credit score, and from 5.875% to 8.125% at a 700 score. Same tool, same assumptions, and the range shifted with nothing but the credit score. It also says a higher down payment typically lowers your interest rate.

CFPB, Explore interest rates, conventional 30 year fixed assumptions as stated by the CFPB, checked November 2, 2026. These are the CFPB's illustrations, not current Arizona quotes.

Look at the width of those ranges. At the same 700 score, offers spread across more than two full points. That spread is the strongest argument I know for shopping, and it is far bigger than anything your first time status will do for you. If your score is the issue, read what credit score you need to buy a house in Arizona before you apply.

For scale, here is what a quarter point is worth. On a $400,000 loan at 7.24%, principal and interest runs about $2,726 a month. At 6.99%, it is about $2,659. That is roughly $67 a month, or about $4,000 over five years. The CFPB defines one discount point as 1% of the loan amount, which is $4,000 on that same loan, so you can see why the break even on points matters. Ask any lender who quotes you points how many months it takes to earn them back.

Run your own numbers

How to shop your rate as a first time buyer

Get official Loan Estimates from more than one lender inside a 45 day window and compare them line by line. The CFPB says multiple credit checks from mortgage lenders within a 45 day window are recorded on your credit report as a single inquiry, so the impact is the same no matter how many lenders you consult.

1. Get preapproved with real numbers. Credit pulled, income and assets reviewed, so the rate you see is a rate you can actually get.
2. Request a Loan Estimate, not a phone quote. The CFPB says a lender must provide it within three business days of receiving your application, and every lender uses the same standard form, which makes comparing easier.
3. Ask about the first time buyer fee waiver by name. If your income is at or under the area median, ask the lender to confirm it is reflected in your pricing.
4. Compare the APR and the points, not just the rate. A lower rate with two points is a different deal than a slightly higher rate with none. Read mortgage rate vs APR in Arizona.
5. Lock when you have a contract. Ask each lender how long the lock lasts and what an extension costs.

This is the part of the job a broker exists for. I can price your file across multiple wholesale lenders on the same day, which is the CFPB's shopping advice done for you. If you want to see what homes your budget reaches, you can browse current listings on Arizona Luxury Property Search, and if you are looking in the West Valley, our Avondale first time buyer guide runs the local numbers.

Does down payment assistance change your rate?

Often, yes. The Arizona Industrial Development Authority says each of its down payment assistance options comes with a different interest rate and tells buyers to ask their lender for current rates. Its HOME Plus program offers up to 4% toward down payment and closing costs, with a second lien that carries no interest and no payment, is forgiven after 60 months, and must be repaid in full if you sell or refinance before then. The income limit is $155,386 as of April 6, 2026. Arizona Is Home ran out of 2026 funds and was retired for the rest of the year as of October 6, 2026.

For the full comparison, read Arizona down payment assistance and its tradeoffs. If you want the whole first time buyer picture, go back to the first time home buyer Arizona guide, or read more about how I work on Blake Hermann's page.

Honest caveat: I cannot tell you how much the fee waiver is worth on your loan until I price it, because it depends on your credit score, your down payment and the lender's pricing that day. On some files it is a meaningful improvement. On a borrower with a high score and a bigger down payment, the fees being waived were small to begin with. Anyone quoting you a fixed "first time buyer discount" without your numbers is guessing.

Sources

All sources checked November 2, 2026. Pricing rules and program funding change, so confirm before you rely on them.

1. FHFA, Targeted Pricing Changes to Enterprise Pricing Framework (October 24, 2022), checked November 2, 2026
2. Fannie Mae, Selling Notice, Area Median Income Based Loan Level Price Adjustment Waiver Determination (April 15, 2026), checked November 2, 2026
3. Freddie Mac, Single Family Seller/Servicer Guide Exhibit 19, Credit Fees, and Exhibit 19A, Credit Fee Caps (Exhibit 19 bulletins through September 30, 2026), checked November 2, 2026
4. Fannie Mae, HomeReady Mortgage; Freddie Mac, Affordable Solutions Spotlight, Home Possible (March 2025), checked November 2, 2026
5. Freddie Mac, Primary Mortgage Market Survey, October 29, 2026, checked November 2, 2026
6. CFPB, Explore interest rates and CFPB, Does my credit score affect my mortgage rate?, checked November 2, 2026
7. CFPB, What happens when a mortgage lender checks my credit?, CFPB, What is a Loan Estimate? and CFPB, Lender credits and points, checked November 2, 2026
8. CFPB, When can I remove PMI?, checked November 2, 2026
9. HUD, Let FHA Loans Help You (down payment as low as 3.5%), checked November 2, 2026
10. VA, Purchase loan, checked November 2, 2026
11. Arizona IDA, HOME Plus program page and 2026 income limit (April 6, 2026) and Arizona Is Home update effective October 6, 2026 (homeplusaz.com), checked November 2, 2026

Pillar Mortgage Group, LLC. NMLS #2700076. Arizona License MB-2009671. Blake Hermann, NMLS #2271358. Equal Housing Lender. This article is education, not a loan offer or a commitment to lend. All loans are subject to credit approval, and rates, limits and programs change without notice.

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