Best online mortgage lenders of 2023

Written by Josh Patoka / December 26, 2022
Reviewed by Jamie Young

Online mortgage lenders are more likely than brick-and-mortar lenders to offer lower fees and interest rates as they have fewer overhead expenses. It can also be easier to compare mortgage rates from online lenders for your desired home loan, whether it’s to buy a house, refinance or tap into your existing equity.

Inside this article

  1. Best online mortgage lenders
  2. Best overall: Better
  3. Best for lower closing costs: Rocket Mortgage
  4. Best for on-time closing: Mr. Cooper
  5. Best for first-time homebuyers: SoFi
  6. Best for no lender fees: Ally
  7. Compare the best online mortgage lenders
  8. Methodology
  9. Frequently Asked Questions

Best online mortgage lenders

  • Best overall: Better

  • Best for low closing costs: Rocket Mortgage

  • Best for on-time closing: Mr. Cooper

  • Best for first-time homebuyers: SoFi

  • Best for no lender fees: Ally

Best overall: Better

Why it’s the best

Better offers competitive rates for conventional mortgages and jumbo loans as well as mortgages backed by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA). For starters, you won’t pay application, origination, or underwriting fees.

Homebuyers in 20 states can get up to $2,000 in lender credits to put toward their closing costs by purchasing a home with the help of a participating real estate agent. The lender’s Better Buying Guarantee will also provide up to $3,500 in lender-paid credits if you decide to refinance within three years of your initial closing.

You can complete the entire mortgage application process online, and it’s possible to receive a customizable preapproval letter within a few minutes. Additionally, you could close on your mortgage up to 10 days sooner than the national average.

Pros and cons

Pros

  • Offers conventional, FHA, VA and jumbo purchase and refinance loans.

  • No application, origination, or underwriting fees.

  • Several ways to receive lender credits to cover some or all of your closing costs.

Cons

  • Doesn’t offer USDA loans or construction loans.

  • Better Real Estate discount is unavailable in some states.

  • Home improvement financing has a shorter repayment period than a typical mortgage.

More details

  • Interest rates: Below national average.

  • DTI ratio: Up to 50%

  • Perks: No origination, application, or underwriting fees, several promotions to reduce closing costs, offers non-commissioned real estate agents.

  • Preapproval time: As little as 20 minutes.

  • Time to close: Typically 3 to 6 weeks after rate lock.

Best for lower closing costs: Rocket Mortgage

Closing costs can be surprisingly expensive—usually 2% to 6% of your home’s purchase price—but Rocket Mortgage makes it easy to earn closing cost discounts through its Rocket Rewards program. First, you can complete short online tasks such as reading articles, watching videos, and using loan calculators to earn reward points. Then, you can redeem your points for credits to put toward your closing costs.

This online lender offers a wide variety of home purchase and mortgage refinancing options, including loans for less-qualified borrowers. For example, it’s possible to qualify for an FHA loan with a median 580 credit score versus the 620 required for most other loan types. 

Conventional, VA, and jumbo loans are also available. Unfortunately, Rocket Mortgage doesn’t offer USDA loans, and the closing process can take a month or longer, which is potentially longer than other lenders on this list.  

Pros and cons

Pros

  • Offers conventional, FHA, VA, and jumbo loans.

  • Closing cost discounts through rewards program.

  • Low credit scores accepted for some loans.

Cons

  • No longer offers USDA loans.

  • No specialized loans or grants for first-time or low-income borrowers.

  • Closing can take longer compared to other lenders.

More details

  • Interest rates: Below national average

  • DTI ratio: Up to 45% for most loans.

  • Perks: Redeem rewards points for closing cost credits, no application fee.

  • Preapproval time: Around 24 hours

  • Time to close: 30 to 45 days.

Best for on-time closing: Mr. Cooper

Why it’s the best

Mr. Cooper makes it easy to compare annual percentage rates (APRs) and repayment options for multiple types of loans. These include conventional and jumbo loans as well as FHA and VA loans. Streamline refinances and cash-out refinances are available, too. 

Depending on the loan program, you may be able to make a down payment as low as 3% of the home’s purchase price for a conventional loan or 3.5% for an FHA loan. You can also qualify for an FHA home loan with a credit score as low as 580.

You can receive a personalized rate quote by email or phone after submitting your mortgage details online as well as a free 45-day rate lock after your initial preapproval.

Mr. Cooper also has one of the most valuable on-time closing guarantees. If your closing date gets delayed for a qualifying reason, the lender will reimburse the first month’s principal and interest payment. Additionally, existing Mr. Cooper customers can qualify for 0.50% in discount points on a new purchase loan. 

Pros and cons

Pros

  • Offers conventional, FHA, VA and jumbo loans.

  • On-time closing guarantee.

  • Fee-free 45-day rate lock.

Cons

  • No USDA loans.

  • Origination and application fees apply.

More details

  • Interest rates: Below national average.

  • DTI ratio: Does not disclose.

  • Perks: On-time closing guarantee, 45-day fee-free rate lock.

  • Preapproval time: Typically 24 hours.

  • Time to close: 30 to 40 days on average.

Best for first-time homebuyers: SoFi

Why it’s the best

SoFi accepts down payments as low as 3% from qualified borrowers, which could make it a good option for first-time homebuyers. All other borrowers will need a 5% minimum down payment. Keep in mind that private mortgage insurance (PMI) applies to conforming loans with a loan-to-value (LTV) ratio above 80%—meaning a down payment lower than 20%. 

Using a pre-screened local real estate agent through the lender’s HomeStory program lets you receive rebates worth up to $9,500. You may also receive a $2,000 closing guarantee if your loan doesn’t close on time. 

You can apply for conventional and jumbo home purchase loans. Home equity lines of credit (HELOCs) of up to 95% of your equity and mortgage refinancing are also available. Unfortunately, this lender doesn’t offer government home loans such as those backed by the FHA, VA, or USDA. 

SoFi offers a variety of banking, investing, and lending products that can satisfy your other financial needs, too. It’s also possible to enroll in the SoFi Member Rewards program to earn rewards points on qualifying activities that you can redeem for cash rewards or to put toward eligible loans. 

Pros and cons

Pros

  • Down payment as low as 3% for first-time homebuyers.

  • $2,000 on-time closing guarantee.

  • Offers rewards program and unemployment protection.

Cons

  • Doesn’t offer FHA, VA, or USDA loans.

  • PMI applies on loans with down. payments below 20%

  • Charges lender fees.

More details

  • Interest rates: Below national average

  • DTI ratio: Up to 36%

  • Perks: $2,000 on-time closing guarantee, 3% down payment accepted for first-time homebuyers, and rate lock for up to 90 days.

  • Preapproval time: Does not disclose

  • Time to close: Does not disclose.

Best for no lender fees: Ally

Why it’s the best

You won’t pay lender fees when you apply for an Ally fixed-rate, adjustable-rate, or jumbo loan. Standard mortgage refinancing and cash-out refinancing are also available without lender fees.

This online lender doesn’t offer FHA, VA, or USDA loans, but it’s possible to qualify for Fannie Mae’s HomeReady Mortgage program, which only requires a 3% down payment and accepts DTI ratios as high as 50%.

If you’d prefer, Ally provides the option to work with a mortgage loan officer to compare your options, which won’t slow down the closing process. Ally discloses that the average time to close is approximately 10 days faster than the industry average.

Pros and cons

Pros

  • No application, origination, processing, or underwriting fees.

  • Down payments as low as 3% through the HomeReady program.

  • Quick closing times on average.

Cons

  • Doesn’t offer FHA, VA, or USDA loans.

  • No banking relationship discount.

  • No discounted real estate agent service. 

More details

  • Interest rates: Below national average.

  • DTI ratio: Up to 50% on select loans.

  • Perks: No lender fees, accepts down payments as low as 3% with select loans.

  • Preapproval time: Within a few minutes.

  • Time to close: A few weeks to a few months.

Compare the best online mortgage lenders

Interest ratesMax DTI ratioTime to close
BetterBelow national average50%3 to 6 weeks
Rocket MortgageBelow national average45%30 to 45 days
Mr. CooperBelow national averageDoes not disclose30 to 45 days
SoFiBelow national average36%Does not disclose
AllyBelow national average50%A few weeks to a few months

Why some lenders didn’t make the cut

Of the 17 mortgage lenders that we reviewed, only a fraction made the cut. The lenders that didn’t have high enough scores to be included received lower ratings mostly due to having a lack of transparency around credit score and DTI requirements as well as preapproval and closing timelines. Some of the excluded lenders also have limited customer service options and bad customer reviews.

Methodology

Our expert writers and editors have reviewed and researched 17 popular companies to help you find the best online mortgage lender. Out of all the lenders considered, the five that made our list excelled in areas across the following categories (with weightings): loan cost (30%), eligibility and accessibility (20%), customer service experience (20%), and ease of application (30%).

Within each major category, we considered several characteristics, including minimum APR, maximum allowed DTI ratio, and minimum credit score requirements. We also evaluated each provider’s customer support options, borrower perks, and features that simplify the borrowing process—like time to close and preapproval time.

Frequently Asked Questions

How do I find online mortgage lenders?

You can find online mortgage lenders by researching home loan companies online. It’s smart to compare rates, terms, and fees from several lenders, including online and more traditional mortgage lenders like banks and credit unions, to choose your best loan option.

What types of online mortgages can I get?
Is an online mortgage lender better than a bank?
Are online mortgage lenders safe?

About the Authors

Josh Patoka

Josh Patoka

Josh became a full-time personal finance writer in 2015 after serving as a transportation operations supervisor for seven years. He draws from his own money management experience of saving for long-term goals, paying off debt, and career changes. His writing has been regularly featured in Forbes Advisor, Fox Business, and several award-winning personal finance websites.

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Jamie Young

Jamie Young

Jamie Young is an authority on personal finance who has been writing and editing for online media for 10 years. Her work has appeared on some of the best-known media outlets including Forbes, Time, CBS News, Huffington Post, Business Insider, AOL, MSN, and more.

Jamie is passionate about finance, technology, and the Oxford comma. In her free time, Jamie takes care of her two crazy cats and ever-growing collection of plants. She’s also an avid gamer who watches way too many true crime documentaries. 

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