Before you compare: make it apples to apples
- Same loan amount, loan type (conventional, FHA, VA), term and fixed or adjustable rate.
- Same lock period and the same lock date. Rates change daily, so request estimates the same day.
- Same assumptions about points and credits. Ask each lender for the same number of points, or for a version with zero points.
- Same down payment and property. A different loan-to-value changes the rate and mortgage insurance.
Mortgage credit checks made within a short window are generally treated as a single inquiry for scoring, so shopping several lenders should not hurt your credit much. The CFPB’s shopping guidance explains how.
Page 1: loan terms and cash to close
Page 1 shows the loan amount, interest rate, monthly principal and interest, whether the rate or payment can change, and whether there is a prepayment penalty or balloon payment. It also shows the estimated total monthly payment, including mortgage insurance and escrow, and the estimated closing costs and cash to close. Compare the rate and P&I first, then the cash to close. A lower rate can come with a bigger cash requirement.
On the CFPB’s sample Loan Estimate, for instance, a $162,000, 30-year loan at 3.875% shows a $761.78 principal and interest payment, with $8,054 in closing costs and $16,054 cash to close after the deposit and down payment. Those are the numbers to line up across lenders.
Page 2: closing cost details
| Section | What it holds | What to compare |
|---|---|---|
| A. Origination charges | Points and the lender's own fees | Points, origination, underwriting. These are the lender-controlled costs and are in the APR. |
| B. Services you cannot shop for | Appraisal, credit report, flood certification | Usually similar across lenders. |
| C. Services you can shop for | Title, survey, pest inspection | You may choose providers; compare quotes. |
| D. Total loan costs | A + B + C | The headline comparison of loan fees. |
| E. Taxes and government fees | Recording fees and transfer taxes | Mostly the same across lenders. |
| F. Prepaids | Prepaid interest, insurance, property taxes | Not lender profit, and mostly not in the APR (prepaid interest is). |
| G. Initial escrow payment | Escrow deposit | Your money, held for taxes and insurance. |
| Lender credits | Credits that offset costs | A credit usually means a higher rate. |
Page 3: the comparison measures
Page 3 has the comparison measures. In 5 Years shows the total you will have paid (principal, interest, mortgage insurance and loan costs) and the principal you will have paid off. It is often the most practical comparison because many borrowers move or refinance within about five years. The APR and the Total Interest Percentage (TIP, total interest over the loan as a percentage of the loan amount) assume you keep the loan to the end. Read APR vs interest rate to see why a lower APR can lose to a lower-cost loan for a short stay.
Mortgage APR comparison
Enter two Loan Estimates to see each APR, the monthly payment and the month one offer starts costing less.
The calculator loads as you scroll. Open the full APR calculator if you prefer.
Assumptions
- Fixed-rate loans with equal monthly payments.
- APR follows the Regulation Z method; only fees you place in an APR category count toward it.
- Estimates only: your Loan Estimate controls.
A one-page comparison worksheet
| Compare | Lender 1 | Lender 2 | Lender 3 |
|---|---|---|---|
| Interest rate and lock period | |||
| Points / lender credit | |||
| Monthly principal & interest | |||
| Estimated total monthly payment | |||
| Section A, origination charges | |||
| Section D, total loan costs | |||
| Cash to close | |||
| 5-year total paid | |||
| APR and TIP |
Fill in each lender’s numbers. Cross out any row where the loans are not the same product. Then run your top two through the rate comparison calculator or the APR calculator to see the break-even, and use the closing cost calculator to sanity-check the fees.
Questions to ask, and what to do next
- Is this rate locked, for how long, and what does an extension cost?
- Which fees can change before closing, and which are fixed?
- Is there a float-down option if rates fall? (See the rate lock guide.)
- Can you match a competing lender's fees or rate?
- What would the estimate look like with no points, and with a lender credit?
Once you pick a lender, compare your final Closing Disclosure with the Loan Estimate you chose. If you are still early in the process, start with the pre-approval guide, and understand your lock options in the rate lock guide.
Sources and further reading
Written by the Reaixo editorial team. Last reviewed . Educational information, not financial, legal or tax advice.
Related terms: Loan Estimate, Closing Disclosure, APR in the full glossary.