Rates
Why Your Rate Differs From the Advertised Rate
That eye-catching number assumes a specific, often ideal, borrower. Here is what moves your real rate.
You see a low rate advertised, you call, and the rate quoted to you is different. That is not a bait-and-switch — it is that an advertised rate describes one specific scenario, and yours is probably not identical to it.
What the ad quietly assumes
Advertised rates are typically built for a nearly ideal borrower: excellent credit, a healthy down payment, a primary residence, a standard loan — and very often they include discount points paid up front to buy the rate down. Change any of those assumptions and the real rate changes.
What actually moves your rate
- Your credit profile. Stronger credit earns better pricing.
- Your down payment (loan-to-value). More equity generally means a better rate.
- The loan type and term, and whether it is conforming or jumbo.
- The property and occupancy — a primary home prices better than an investment property.
- Points. Paying points lowers the rate; the advertised figure may assume you are paying them.
The fair comparison is a personalized quote, not an advertisement. Ask every lender for a Loan Estimate on the same scenario the same day, and compare the rate and the points and fees behind it. That is the only honest apples-to-apples.
Pro tip
When you see a strikingly low rate, look for the points. A rate that requires paying two points to achieve is a different product from a no-point rate. Neither is wrong — but compare like with like.
Common questions
Why is my quoted rate higher than the advertised rate?
Because the advertised rate assumes a specific, usually ideal, borrower and often includes paying discount points. Your credit, down payment, loan type and property all shape your real rate. A personalized quote is the honest number.
Are advertised mortgage rates misleading?
Not necessarily dishonest, but they describe one scenario — frequently with points included. Treat them as a starting reference and compare personalized Loan Estimates to see what you would actually pay.