How to Compare Mortgage Offers (Apples to Apples)

When offers come in, the lowest interest rate isn't always the cheapest loan. To compare fairly, you need to look at a few numbers together — and the Loan Estimate makes that easy.

Get a Loan Estimate from each

Lenders must provide a standardized Loan Estimate within three business days of your application. Because the format is identical, you can lay two or three side by side and compare the same boxes.

Compare these, in order

• APR — folds most fees into a single yearly cost; better than rate alone for comparing.
• Discount points — paying points buys a lower rate; make sure you're comparing the same point structure.
• Lender/origination fees — vary widely and are negotiable.
• Monthly payment (P&I) and total cash to close.

Watch for the trade-offs

A rock-bottom rate with high points costs more upfront; a 'no-cost' loan usually carries a higher rate. The right pick depends on how long you'll keep the loan — the same break-even math you'd use for a refinance.

Make them compete on the same day

Rates move daily, so gather offers in a tight window. The simplest way to get comparable Loan Estimates at once is to let multiple brokers bid for the same request.