How to choose
What to weigh before you pick
It usually comes down to 3 things. Compare your options on each before deciding.
The rate plus fees, not the headline number alone.
Origination, points, and third-party fees up front.
Loan types offered, speed to close, and servicing.
- Rate explains payment, APR helps compare cost.
- A lower rate can lose if points or fees are too high.
- Your time horizon decides whether upfront costs are worth it.
How to choose in 60 seconds
- Get Loan Estimates for the same loan type and term.
- Compare interest rate and APR.
- Compare points and lender fees.
- Calculate break-even on any upfront cost.
- Choose based on your time horizon.
Quick picks
- Metric
- Interest rate
- Why
- Drives interest portion of payment.
- Metric
- APR
- Why
- Includes certain costs.
- Metric
- Points break-even
- Why
- Shows if upfront cost pays back.
- Metric
- Low upfront costs
- Why
- Less time to recover fees.
Current mortgage options
The current average 30-year fixed rate is 6.72% APR. Use that figure as your baseline, then compare each lender's Loan Estimate against it to see whether points or fees are moving the advertised rate away from the market average.
What points can cost
If one point costs 1% of the loan amount, one point on a $400,000 mortgage costs $4,000. If that point saves $100 per month, break-even is $4,000 / $100 = 40 months.
Lenders advertise the rate, not the APR, because the rate is the smaller number. The best advertised note rate today runs close to 6.53% APR, but that figure typically assumes at least one discount point and a strong credit file. Run your own loan amount and points cost through the mortgage points break-even calculator before you assume the lowest advertised number is the cheapest loan. For the mechanics of comparing that break-even against how long you will keep the loan, see the refinance break-even guide, which walks through the same division for an existing mortgage.
Choose X if
- Use APR if you are comparing multiple lenders.
- Use interest rate if you are estimating monthly payment.
- Pay points if the break-even is comfortably inside your ownership horizon.
- Skip points if you expect to move or refinance soon, a case covered in more detail in common mortgage mistakes.
Compare the tradeoffs
- Interest rate
- Strong
- APR
- Indirect
- Interest rate
- Weak
- APR
- Better
- Interest rate
- Monthly payment
- APR
- Comparing offers
- Interest rate
- Ignores upfront cost
- APR
- May not capture every cash need
- Interest rate
- Affordability
- APR
- Total cost comparison
When this recommendation changes
You keep the loan longer: Paying points can become more attractive.
You sell soon: Lower upfront costs usually matter more.
Fees differ widely: APR becomes more important.
Loan terms differ: APR comparisons are less clean unless the term and product match.
For the fundamentals of shopping the note rate itself before you start comparing APRs, the best mortgage rates guide covers how lenders set pricing day to day. The mortgage guide is the wider starting point if you are earlier in the process than comparing Loan Estimates.
Sources and verification
- Verified
- 2026-06-26
- Source
- CFPB mortgage tools
- Verified
- 2026-06-26
- Verified
- 2026-06-26
How we ranked
We ranked comparison factors by their impact on total cost, payment clarity, and borrower time horizon. We did not rank by advertised interest rate alone.
Compensation disclosure: SwitchWize may earn referral fees from mortgage partners. Organic rankings are based on borrower value.
What to do next
What to Do Now
Frequently Asked Questions
What is the difference between mortgage APR and interest rate?
Why can a lower mortgage rate cost more?
Should I compare APR or interest rate?
Are points included in APR?
What if I will keep the loan for a long time?
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