How to compare mortgage rates with multiple lenders

Shopping around isn’t just about the rate, either. You can also compare the customer service and closing costs at different lenders. And you can find out answers to important questions, such as whether the lender will actually service the loan or sell it off after originating it. 

That said, getting a low rate is certainly top of mind for many borrowers, so that’s what we’ll focus on here. Let’s dive in and examine how to comparison shop for a mortgage, step by step.

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1. Choose the best mortgage type for you

• Conventional loans: Conventional loans are mortgages that aren’t part of a federal program. Lenders can set their own eligibility requirements, within the constraints of fair lending regulations, and down payment requirements may be as low as 3%. Very large conventional loans are called jumbo loans. 
• VA loans: A Department of Veterans Affairs (VA) loan could be a good option if you’re an eligible military service member, veteran, or surviving spouse. The loans often offer a low interest rate and don’t require a down payment. 
• FHA loans: Government-backed Federal Housing Administration (FHA) loans are available to first-time homebuyers—which actually means you haven’t owned a home during the previous three years or meet other eligibility criteria—as well as other applicants. FHA loans can be attractive because they don’t necessarily require good credit or a high down payment. 
• USDA loans: There are two types of USDA loans—one you get directly from the U.S. Department of Agriculture (USDA), and the other you get through a partner lender. The loans don’t require a down payment and may have a low interest rate. However, they’re only available for very-low- to moderate-income households and you need to buy an eligible home in a rural area. 

You’ll want to determine the mortgages you might qualify for and learn more about them, because there are pros and cons for each option—including various upfront fees and mortgage insurance requirements. 

Another factor to consider is whether you want an adjustable-rate mortgage (ARM) or a fixed-rate mortgage. ARMs tend to start with a lower interest rate for a specific period, such as five or seven years. After that, the rate—and your mortgage payment—will automatically rise or fall based on changes in a benchmark interest rate. 

An ARM can be riskier in the long run. But you might save money if rates drop, or if you can refinance into a fixed-rate loan with a lower rate or you sell your home before the initial fixed-rate period ends. 

2. Compile a list of potential mortgage lenders

The next step is to identify reputable lenders that offer the mortgage types you’re most interested in. Some starting points are to contact the banks or credit unions that you already have a relationship with, reach out to lenders online, and ask your real estate agent for recommendations. 

Generally, you’ll work with either a loan officer or a mortgage broker.

• Loan officers: Loan officers usually work directly for a lender, such as a bank or credit union, and can help you compare mortgage options from the company. They’ll collect your documents and work with you throughout the application, underwriting, and funding process.
• Mortgage brokers: Mortgage brokers are independent professionals who prepare your application and collect offers from multiple lenders. The lender underwrites the loan, but the mortgage broker will be your main point of contact throughout the process. 

Could you just use a mortgage broker to shop around and get mortgage quotes? Yes, but that won’t necessarily guarantee the best offer. Although brokers can comparison shop on your behalf, they might only work with a limited list of lenders. 

Additionally, the broker might not have access to every type of mortgage product that lenders offer or be aware of special financing or down payment assistance programs. Mortgage brokers also get a fee for their work. The lender often pays the fee, but double check that you won’t have to cover it as part of your closing costs. 

In other words, don’t limit yourself to one or the other. You can get quotes from a broker or two while also connecting directly with loan officers.

3. Gather documentation and get prequalified or preapproved

Start gathering documents that will verify your identity, address, employment, assets, and income. These may include a government-issued picture ID, tax returns, pay stubs, and recent statements from bank, brokerage, and retirement accounts. 

Depending on where you are in the process, you can then get prequalified or preapproved:

• Mortgage prequalification for when you’re just starting. A mortgage prequalification is generally a simpler process that shows you estimated loan offers based on your self-reported income, debt, and credit score. 
• Mortgage preapproval for when you’re ready to make offers. A mortgage preapproval could require you to submit a more thorough application and copies of your documents. The lender may check your credit, but can give you much more accurate loan offers based on your verified information.

Some lenders use the terms in different ways, or offer a “verified approval” as the more complex option. No matter the language, know that you need the lender to verify your information and check your credit to give you the most accurate estimates. A preapproval letter from the lender can also make your home offers more attractive. 

Getting preapproved with multiple lenders can help you compare rates now and set you up for a last-minute decision later. Multiple credit checks also won’t do additional damage to your credit score if they all happen within a 14-day window. Plus, once the lenders have all your documents, you might only need to send new monthly account statements and pay stubs to keep your offers up to date

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4. Decide if buying mortgage points is right for you

One thing you’ll quickly notice is that advertised mortgage rates often include mortgage points. 

When you buy points, you’re prepaying interest in exchange for a lower mortgage rate. It can be a worthwhile trade-off if you think you’ll keep the mortgage for a long time. However, if you might refinance or sell the home within a couple of years, you might be better off with a higher rate and more money in your pocket for now. 

Lenders also might offer you credits, which are basically the reverse of points. In exchange for taking a higher interest rate, you’ll receive some cash upfront that you can use for closing costs or other expenses.

You don’t need to decide about points or taking credits right away, but consider what might make the most sense for you. And ask about points and credits to ensure you’re making an apples-to-apples comparison. 

5. Select a lender and consider a mortgage rate lock

Once you identify a few top choices, keep your preapproval offers updated as you look for a home. Then, get a preapproval letter from the lender that you like the most to include in your offer. 

You can also look into locking the rate on your mortgage offer. Mortgage rates frequently change, and locking in a rate can guarantee you receive that rate for a specific period, such as 30 or 90 days. 

But know that there can be some exceptions that lead to a rate change, such as if you switch loan types, your creditworthiness changes, or the home appraisal is different than expected. Additionally, lenders might let you adjust your rate once if interest rates drop.

When is the best time to lock in a rate?

Often, you can’t lock your rate until your offer is accepted. However, there are lenders that have “lock and shop” programs, which allow you to lock in a rate without identifying a specific property or having an accepted offer. 

Learn more: Home prices keep going up while new homes keep getting smaller. 

Ask your loan officer or broker about the timing for rate locks, if locking early makes sense, and whether there’s a fee (upfront or paid at closing) for a rate lock.

Can you switch lenders after your offer is accepted?

Things move quickly once your offer on the home is accepted. However, you might not have been able to lock in a rate with most lenders until this point. 

Technically, you might be able to change lenders right up until you close. If you had several preapprovals, you might even be able to quickly get offers with a rate lock from several lenders after your offer is accepted. But changing lenders can lead to delays, and the potential downsides might outweigh the benefit of getting a slightly lower rate. 

For example, if the new lender can’t close on time, you might have to pay the seller to extend your closing or risk losing your earnest money deposit. Additionally, even if the first lender already had the home appraised, you might need to pay for another appraisal with the new lender. Give your real estate agent a heads-up if you think you might switch lenders after making an offer.

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The takeaway

Look at getting the right mortgage much the same way you’re evaluating homes. You want something that’s going to be a good fit long term, not just the first option that comes along. 

Shopping for mortgage offers may be tedious, but it can save you real money on your eventual monthly payment. Freddie Mac estimates that those who shop with multiple lenders could save between $600 and $1,200 per year—while the Urban Institute puts the number in the ballpark of more than $100 per month in potential savings for those who shop around and negotiate. 

With the average rate on a 30-year, fixed-rate conventional mortgage dropping in early August 2025 to its lowest level since April of the same year, homebuyers who are willing to put in the extra effort to comparison shop are best poised to take advantage of the situation.

Frequently asked questions

Why are my mortgage interest rate and APR different?

A mortgage’s interest rate tells you how much you’ll pay in interest to borrow money. The annual percentage rate (APR) tells you the annualized cost of borrowing money based on the loan’s interest rate, fees, points, and other required charges. The APR is often higher than the interest rate. 

What should I consider other than rate when picking a lender?

We focused in this article on how to gather quotes and compare rates, but the interest rate is only one of the things to consider. You could also compare closing costs, whether the lender will also service the loan, and whether the lender will accept down payment assistance if you qualify. Your experience working with the broker or loan officer could be important as well, along with their reputation for closing on time.

How can I see how much PMI will cost on my mortgage?

You can look for private mortgage insurance (PMI) calculators online to estimate your PMI premiums. For example, Freddie Mac provides a calculator here.

However, your PMI could depend on your down payment, credit score, and debt-to-income (DTI) ratio. Ask your loan officer or broker for a more specific estimate based on your application. The Loan Estimate forms you receive from lenders will also list an estimated PMI premium.

Will closing costs differ between different mortgage lenders?

Closing costs generally range from about 2% to 6% of your loan amount. Some of these depend on the price of your home, such as your prepaid property tax and insurance payments. You can get an estimate of what closing costs might look like by plugging some information such as your state and the home’s purchase price into this calculator from Fannie Mae. 

But different mortgage lenders may also charge varying fees at closing. Comparing closing costs can be an important part of comparing mortgage loan offers to find the one that’s the best fit for you.

Is it better to shop around on my own or get a mortgage broker?

It may benefit you to do both. Mortgage brokers can use your application and gather offers from multiple lenders, which can be an effective way to shop around. However, you may also want to apply directly with several lenders to see what they offer. Some lenders might have loan options and offers that you won’t receive if you’re working with a broker, and the closing might be smoother if you’re working directly with a lender.