How to compare mortgage rates

The rate in any calculator is an example. The rate you'll actually pay depends on you and on the lender, and lenders don't all offer the same rate to the same borrower. Comparing a few quotes is one of the simplest ways to lower your cost.

Why it's worth a few phone calls

On a $360,000, 30-year loan, the difference between 6.50% and 6.25% is about $59 a month, or $21,191 over the full term. Freddie Mac's research found that borrowers who got one additional quote saved about $1,500 on average over the life of the loan, and about $2,900 with five quotes (Freddie Mac, April 2018). Those are past averages, not a promise; your savings, if any, depend on your situation and the market.

The 5-step checklist

Know your numbers first. Price, down payment, loan amount and what monthly payment works for you. Run them in the mortgage calculator or see how much house you can afford.
Ask at least three lenders, such as a bank, a credit union and an online lender or broker, for quotes on the same loan: same amount, term, loan type and down payment, on the same day if you can, since rates move daily.
Get an official Loan Estimate from each. It's a standard three-page form, so quotes line up side by side (CFPB guide).
Compare more than the rate. Look at the APR, discount points, lender fees (section A of the Loan Estimate) and cash to close. A lower rate bought with points can cost more if you sell or refinance early.
Shop within 45 days. Multiple credit checks from mortgage lenders are recorded as a single inquiry when the last one is within 45 days of the first (CFPB). Then ask the lender you choose how and when to lock your rate.

What lenders will ask for

Income: recent pay stubs, W-2s or tax returns if you're self-employed
Assets: bank and investment statements for your down payment and reserves
Debts: car loans, student loans, credit cards (your debt-to-income ratio matters)
Permission to check your credit

Comparing investor and rental property loans

Loans for rental properties usually cost more than loans for a home you live in and usually need a larger down payment. Besides conventional investment-property loans, many investors use DSCR loans, which qualify the property's rent against its payment instead of your personal income. Compare them the same way: same loan amount and terms, the full fee list, and any prepayment penalty, which is common on DSCR loans.

Check the deal first with the DSCR calculator, rental property calculator or BRRRR calculator.

Next step

Start with your numbers in the mortgage calculator, then take the loan amount to a few lenders and compare their Loan Estimates.

General information, not financial advice. RealEstateCalculator.org is not a lender. See our disclaimer.