Why are Mortgage Rates Different by Lender?

Understanding why mortgage rates vary by lender can help you select the right lender for your situation.

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Why do Mortgage Rates Differ by Lender?

While interest rates are determined by national and world market forces, there are a number of reasons mortgage rates are different for different lenders. These include lender overhead costs, closing costs, and mortgage bankers’ experience, among other factors.

What Causes Different Mortgage Rates Between Lenders?

Lender Overhead Costs

The lender’s overhead cost structure is a big factor in determining why mortgage rates are different by lender. Lenders who contain cost and keep their overhead low have the ability to offer better rates and/or closing costs.

Closing Costs

Closing costs are directly associated with the home interest rate being offered. A lender may have a lower rate that is disguised by higher closing cost. This means that you are effectively paying for the lower rate and this may not be in your best interest.

Incomplete Information

Inaccurate rate quoting can make it appear that a lender’s rate is lower than others and maybe even lower than the overall market. Lenders are usually within .25 percentage points of each other. If one lender’s rate stands out from all the others, it may be a misquote.

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Why Homesite Mortgage?

At Homesite Mortgage, we know that not every lender keeps your best interests in mind. That’s why we’re committed to prioritizing your needs and helping you find the best interest rates possible. Our experienced mortgage bankers will help you through every step in the process, and make sure you receive the best rate possible for your home loan. We keep our costs low so we can extend these savings to you, and offer you the most competitive rates on the market.


    30-Yr Rate

    15-Yr Rate

  • 2.999%
    3.257% APR

    2.841% APR

  • 3.125%
    3.385% APR

    2.967% APR

  • Citizens Bank Logo

    3.512% APR

    3.094% APR

  • 3.250%
    3.488% APR

    3.957% APR


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Tips for Choosing a Mortgage Lender

Ask for Referrals and Testimonials

When selecting a mortgage lender, do some research by asking friends and family in your area for referrals and their overall experience with the home loan process. Once you’ve narrowed down your list of potential lenders, ask those lenders for testimonials. Compare how your home loan priorities were handled for previous clients. Homesite Mortgage is happy to offer you testimonials of borrowers we’ve worked with in the past. If you have any additional questions about home loans, contact us today.

Prioritize Your Home Loan Needs

Every mortgage lender is different. Some lenders advertise their speed for closing loans, but it likely comes at the expense of quality customer service. Some lenders may be known for great customer service, but their rates are higher. Make a list of what’s most important to you in selecting a lender. Homesite Mortgage keeps the all the qualities you want in a lender. We’re a firm that’s large enough to offer a vast list of financing solutions, but small enough to keep rates low and customer service high.

Ensure the Loan You Need is Available

If you are looking for something other than a conventional loan, be sure that the lenders you’re considering offer the loan you need. With so many loan options available, clue into which loan is best suited for your needs, and research how much experience your lender has handling the type of loan you want. Homesite Mortgage offers conventional, FHA, VA, USDA, and jumbo home loans.

Use Your APR

The annual percentage rate (APR) is an underutilized tool to determine if there is hidden cost contained in the rate that is quoted. Compare the APR as well as the interest rate to get a more complete picture of the combined rate and closing costs.

Look For Low Advertising Costs

Advertising costs can often be the largest overhead expense for a lender. So if you see a lot of TV commercials or hear a lot of radio ads, you may be the one footing the bill for these expenses. A high-quality lender’s good reputation is their best marketing tool.

Get an Accurate Quote with Complete Information

To accurately quote an interest rate, a lender will need to know your complete credit profile as well as the details of your proposed loan structure. If they don’t ask you for this information, you likely are not receiving an accurate quote, and comparing this quote to others that are customized for you will not be a fair comparison.