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The short answer
Advertised rates are the lender's best-case scenario: top-tier credit, large down payment, specific loan type, sometimes with discount points baked in. Your quote reflects your scenario. The most common reasons for the gap: (1) your credit score is below the advertised tier (usually 740–760+), (2) your down payment is smaller (higher loan-to-value), (3) the advertised rate assumes discount points you'd have to pay, (4) it's a different loan type or term than you're shopping, or (5) the advertised rate is stale. Get a Loan Estimate — it shows the assumptions behind any quote.
The 5 usual suspects
1. Credit score tier
This is the single biggest driver. Most advertised rates assume a 740 or 760+ FICO. Each tier below that adds cost:
- 760+: best pricing (the advertised number)
- 740–759: slightly higher
- 700–739: meaningfully higher — often 0.25%–0.50% above the advertised rate
- Below 700: significantly higher, and some loan programs add price adjustments at every 20-point band
A 720 score vs. a 760 score on the same loan can mean 0.375% in rate difference. That's real money — roughly $90/month on a $400,000 loan.
2. Loan-to-value (down payment size)
Advertised rates typically assume 20%+ down (80% LTV or lower). Smaller down payments mean:
- Higher rate — lenders price in the added risk, often 0.125%–0.25% more for 10% down vs. 20% down
- Mortgage insurance — below 20% down on conventional loans, you'll pay PMI on top of the rate
- Loan-level price adjustments — Fannie Mae and Freddie Mac's pricing grids penalize high-LTV + lower-credit combinations hardest
3. Discount points buried in the "advertised" rate
Read the fine print. Many advertised rates assume you're paying 1–2 discount points (each point = 1% of the loan amount, paid upfront to buy the rate down). A "6.25% rate" with 2 points costs you $8,000 upfront on a $400,000 loan. The zero-point rate — what you'd actually pay with no buy-down — might be 6.75%. Always check whether the advertised rate includes points.
4. Wrong loan type or term
That eye-catching 5.99% might be a 15-year fixed, a 5/1 ARM, or an FHA rate — not the 30-year fixed conventional loan you're shopping. Lenders advertise their lowest number across all products. Verify the product, term, and loan type match what you need.
5. Stale or "starting at" rates
Some advertised rates are updated weekly, not daily — in a rising-rate market, yesterday's number is already gone. "Starting at" or "as low as" language means almost nobody qualifies for that exact figure.
How to get the real number
- Request a Loan Estimate. It's the standardized form every lender must provide within 3 business days of your application. It shows the rate, APR, fees, and — critically — the assumptions behind them.
- Ask for the zero-point rate. "What's the rate with zero discount points for my credit score and down payment?" This is the apples-to-apples number.
- Get 3+ estimates on the same day. Rates move daily. Same-day estimates are the only valid comparison.
- Compare with our tool. Upload your Loan Estimates and see side-by-side which is actually cheapest for your time horizon.
Methodology and limitations
Credit-tier and LTV price adjustments reference Fannie Mae/Freddie Mac loan-level price adjustment grids, which change periodically; the rate differences cited are typical ranges, not quotes. Advertised rates on lender pages carry their own assumptions — always open the source. Rate data referenced is as of October 2026.
Reviewed by the LoanMate.ai editorial team.
Primary sources
- Consumer Financial Protection Bureau (CFPB): "What is a Loan Estimate?" and "Your Home Loan Toolkit"
- Federal Housing Finance Agency (FHFA): conforming loan-level price adjustment framework
Next action
Browse today's published mortgage rates → to see the market range, then compare your Loan Estimates side by side → when you have quotes in hand.