Mortgage Rates
Why Two Borrowers Get Different Mortgage Rates
Credit score, down payment, property type, occupancy, loan purpose and points all change your rate. Here is what actually drives the number you are quoted.
Updated 2026-08-21| Applies to: Anyone comparing rate quotes.
The short answer
The advertised rate is a starting point that assumes an ideal borrower. Your actual rate is adjusted for credit score, down payment, property type, occupancy, loan purpose, loan amount and whether points or lender credits are included, which is why two people on the same day get different quotes.
What adjusts a rate
| Factor | Direction |
|---|---|
| Higher credit score | Generally lower rate |
| Larger down payment | Generally lower rate, with thresholds that matter |
| Investment property or second home | Generally higher than a primary residence |
| Two to four unit property | Generally higher than single family |
| Cash out refinance | Generally higher than rate and term |
| Paying discount points | Lower rate, higher upfront cost |
| Taking lender credits | Higher rate, lower upfront cost |
Why online rates look lower
Advertised rates typically assume excellent credit, a large down payment, a single family primary residence, and points paid at closing. Change any one of those and the real quote changes.
Comparing quotes honestly
- 1.Compare Loan Estimates, not verbal quotes
- 2.Confirm the same loan amount, program, term and lock period
- 3.Look at the points or credits line, not just the rate
- 4.Compare total costs at the point where you expect to sell or refinance
This site does not publish live rates. Pricing changes daily and depends on your specific file.
Frequently Asked Questions
People also ask
Is APR always higher than the interest rate?
Usually APR is equal to or higher than the interest rate because it factors in certain additional costs, though the exact difference depends on the fees included in the calculation.
Read: How to Compare Mortgage Rates the Right WayAre discount points tax deductible?
Points may be deductible in some circumstances, but tax treatment depends on your situation, so it is worth checking with a tax professional.
Read: Mortgage Points, Fees, and Lender Credits: What Do They Mean?Does the Federal Reserve set mortgage rates?
No. The Fed sets short term policy rates. Mortgage rates follow long term bond market pricing, which reacts to inflation and growth expectations.
Read: How Mortgage Rates Are Actually SetWhat is one point?
One discount point is one percent of the loan amount, paid at closing in exchange for a lower rate. The rate reduction per point varies daily.
Read: Should I Buy Down My Rate?Terms used in this guide
- Interest Rate
- The annual rate charged on the loan balance, used to calculate the interest portion of each payment. It is not the same as APR.
- APR
- The annual cost of a loan expressed as a rate that includes the interest rate plus certain lender fees, designed to help compare offers.
- Discount Points
- An upfront fee paid to permanently lower the interest rate. One point equals 1% of the loan amount.
- Lender Credit
- Money the lender applies toward your closing costs in exchange for accepting a higher interest rate.
- Loan to Value
- The loan amount divided by the property value. A $200,000 loan on a $250,000 home is an 80% LTV.
- Rate Lock
- A lender's commitment to hold a specific interest rate for a set number of days, subject to the terms of the lock and the loan closing on time.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
How Mortgage Rates Are Actually Set
What actually drives mortgage pricing, why your rate differs from the advertised rate, and which parts of the equation you control.
Mortgage CostsHow to Compare Mortgage Rates the Right Way
Learn how to compare mortgage rates using APR, points, lender credits, cash to close, and break-even analysis instead of the rate alone.
Mortgage RatesShould I Buy Down My Rate?
How permanent points and temporary buydowns differ, how to run the break even math, and when paying for a lower rate is a poor trade.
Mortgage CostsMortgage Points, Fees, and Lender Credits: What Do They Mean?
Understand discount points, origination charges, lender credits, and APR so you can evaluate closing cost options and estimate a rough break-even point.
Questions about your own numbers?
Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.