Buy Discount Points

• Discount mortgage points are effective for lowering the interest rate on a mortgage loan, and ultimately reducing the mortgage payment. According to Bankrate.com, discount points refer to pre-paid interest on a home loan. Every point paid to a mortgage lender reduces the interest on a mortgage by .25 percent. This can result in a significant savings if paying two or more points. Regrettably, discount points aren't cheap---each point costs 1 percent of loan balance.
  
  

Clean Up Credit

• Credit ratings also have a bearing on the interest rate on a mortgage, and people with the highest credit scores receive the best mortgage rate. Getting the lowest mortgage payment possible calls for maintaining a good credit score prior to acquiring a mortgage loan. The minimum score to qualify for a mortgage is around 680, but scores 740 or higher result in discounted rates and mortgages. Keys to a good score include paying bills on time and paying down debts.
  
  

Shopping Around

• Comparison shopping is another useful tool for getting a discount on the mortgage interest and payment. Lenders vary, as do interest rates. Taking time to research different lenders and asking for free loan quotes can save you money on the mortgage. For example, one mortgage company may decide that you qualify for a 6.25 interest rate, whereas another lender may qualify you for a 5.75 interest rate. This difference saves you money on the mortgage each month.
  
  

Save with a Down Payment

• Affordable down payments around 5 percent of the sale price are commonplace. However, paying a much higher down payment---at least 20 percent---can save money on your mortgage in two ways. For starters, lenders tend to discount the interest rate on a mortgage loan when borrowers forward higher down payments. And secondly, home loans with a 20 percent down payment do not require private mortgage insurance, which can save you hundreds each month.