Permissible maximum no-load and load losses of distribution transformers are given in EN50588-1 regulation. The main parameter in transformer design, which affects the core loss of a transformer, is core grade. Selecting the superior grades, which have better electromagnetic performance, transformer no-load losses could be minimized. However, such grades increase the cost of core. In this study, ability of designing distribution transformers, which correspond to the loss classes given in EN50588-1, is investigated using eleven different core steels. Then mixed graded core constructions are evaluated to minimize the core material cost, by means of technical and economical manner. Analytically calculated parameters of designed mixed graded transformer are investigated and verified by both electromagnetic simulations using finite element method and experimental tests of manufactured prototype transformer. Considering the current specific costs of different grades, core costs of mixed cores were calculated as 28,2%; 4,45% and 7,81% lower than the reference single graded cores for A0, AA0 and AAA0 loss classes, respectively.