Mortgage Rates: How They Work and How to Compare Today's Offers

Rates are the price of money, and they move every day. We do not publish fake 'live' rate tables — instead, here is the knowledge that actually saves you money: what sets your rate, how offers are built, and how to compare them properly.

What is a mortgage rate, exactly?

Your mortgage rate is the annual interest charged on your loan balance. It is set in bond markets, not by your bank's mood: lenders price loans off the 10-year Treasury and mortgage-backed securities, then add margins for their costs, risk and profit. When investors demand higher yields, mortgage rates rise — usually within hours.

The rate you get is personal

• Credit score — the single biggest lever you control. The gap between a 640 and a 760 score can exceed 1% of rate on the same loan.
• Down payment / LTV — pricing improves in steps, with the best tiers at 25%+ equity and penalties below 20%.
• Loan type — VA and FHA rates often price below conventional; jumbo rates are frequently competitive because borrowers are strong.
• Term — 15-year rates typically run 0.5–1% below 30-year rates; ARMs start lower still.
• Points and credits — you can buy the rate down or sell it up; see the points calculator.
• Property and occupancy — investment properties and condos price higher than owner-occupied houses.

Typical spreads between loan types

Exact numbers change daily, but the relationships are stable: 15-year fixed usually prices about 0.5–1% under 30-year fixed; 7-year ARMs about 0.25–0.75% under; VA loans often 0.25–0.5% under conventional for eligible borrowers; FHA similar to conventional but with mortgage insurance costs that change the true comparison. Use these spreads to sanity-check any quote you receive, then get the payment with the payment calculator.

How to compare rates the right way

1. Request Loan Estimates from at least three lenders on the same day — rates move, and stale quotes mislead.
2. Compare APR and total lender charges (Sections A and B), not the headline rate alone. Our comparison calculator totals everything.
3. Ask if the quote is locked or floating, the lock period, and the cost to extend.
4. Recheck the day before you lock — the market may have moved in your favor.

When should you lock a rate?

Locks typically run 30–60 days. Lock when you are under contract, the rate fits your budget, and closing fits inside the lock window. 'Float down' options cost extra but let you capture one improvement. Nobody times the market perfectly — a rate that makes the home affordable at a payment you are comfortable with, from the affordability calculator, is a good rate.

Fixed vs adjustable, in one paragraph

Fixed rates buy certainty for the loan's life; ARMs buy a lower start in exchange for future uncertainty bounded by caps. If you will hold the loan long past an ARM's fixed period, the fixed rate is usually worth its premium. Price both honestly with the ARM calculator — including its worst case.