Why “live rates” on lender sites aren't your rate

Why is the rate on a lender's website different from the rate I'm offered?

Because the rate on the website is built for a sample borrower, not for you. It assumes a particular credit score, down payment, loan amount, property type and loan purpose, and often that you'll pay discount points at closing.

If your details match that sample, you might see something close to it. Most people's details don't match, so their rate is different, sometimes by a little and sometimes by a lot.

What does an advertised rate usually assume?

Usually the best-case borrower. That means a high credit score, a large down payment or a lot of equity, a loan amount in a typical range, a single-family home you'll live in, and a standard lock period.

Many also assume you'll pay discount points, which is cash at closing that buys the rate down. The fine print under the rate, or the APR beside it, is where you'll find that. A big gap between the rate and the APR is the giveaway. Rate vs. APR explains how to read it.

What changes your mortgage rate?

Your credit score is one of the biggest factors. Higher scores usually get lower rates, and the change tends to come in steps as your score crosses certain cutoffs. How your credit score band changes your rate covers how that works.

How much you put down, or how much equity you have, matters almost as much. So does the loan type, whether it's a purchase or a refinance, and whether you're taking cash out. A condo, a multi-unit property, a second home or a rental usually gets a different rate than a single-family home you live in. And the more points you pay, the lower the rate, while a lender credit raises it.

Why do rates change every day?

Mortgage rates follow the market for mortgage bonds, which moves with inflation, economic news and investor demand. Lenders update their rates at least daily, and on a busy news day they can change more than once.

That's why a rate you saw yesterday may not be there today, and why a rate isn't yours until it's locked. Rate locks explained covers when to lock and what a lock protects.

How do you see the rate you'll actually get?

You need to give a lender your real details: your estimated credit score, the home's price or value, your down payment or loan balance, the property type and the loan you want. A quote built on those is the first number worth comparing.

The quote becomes firm once your credit is checked, your application is reviewed and the rate is locked. Before then, it's an estimate based on what you've told the lender. Even then, a locked rate holds only for the lock period and only if your loan details stay the same.

How do you compare rates from different lenders?

Make sure every quote is for the same loan. Same loan type and term, same down payment, same lock period and the same number of points. Otherwise you're comparing different things.

Then look past the rate. Check the lender fees and points on each Loan Estimate, because that's where quotes differ most, and use the APR as a quick check for costs hiding behind a low rate. Closing costs shows where those charges sit on the Loan Estimate.

Quick answers

Are online mortgage rates accurate?

They're accurate for the sample borrower they're built for. Your rate depends on your own credit, down payment, loan and property.

Why is my mortgage rate higher than the advertised rate?

Usually because your details differ from the advertised scenario, or because the advertised rate included discount points.

How often do mortgage rates change?

At least daily, and sometimes more than once a day when the market is moving.

When is my mortgage rate final?

When it's locked, as long as you close before the lock expires and your loan amount, appraised value and credit don't change. Until then, it can change with the market or with your details.