Reason 1: one quote includes points, the other doesn't
Every rate has a price. One lender may quote a lower rate that quietly requires points. Another quotes a higher rate with no points. Until you compare what each rate costs, you can't tell which is cheaper. See the true cost of a mortgage.
Reason 2: pricing adjustments for your file
Fannie Mae and Freddie Mac charge loan level pricing adjustments based on your credit score, down payment, property type and loan purpose. A lender quoting from a generic rate sheet before seeing your credit will be wrong in one direction or the other. A quote is only real once it's based on your actual score and scenario.
Reason 3: Fannie Mae vs Freddie Mac
Full details: Fannie Mae vs Freddie Mac, why the right one matters.
The two agencies have different rules and sometimes different pricing for the same borrower. They treat deferred student loans differently, for example. One file can price or qualify better at one than the other. A lender who only works with one may not show you the better option.
Reason 4: the mortgage insurance company
PMI premiums vary by insurer. On the same loan, one mortgage insurance company may quote noticeably less than another, and the right structure, monthly, single premium or lender paid, changes the math too. Many borrowers never see PMI shopped at all.
Reason 5: lender overlays and margins
Some lenders add their own rules and charge more for files they consider riskier. Others simply price higher across the board. See lender overlays.
Reason 6: the lock period and the day
Rates change daily, sometimes more. A quote from Monday and a quote from Thursday aren't comparable, and a 60 day lock costs more than a 30 day lock.
How to compare quotes honestly
Get Loan Estimates on the same day, for the same loan amount, down payment and lock period. Compare the rate, the points in Section A, the lender credits, and the monthly PMI. Then look at total cost over the time you'll actually keep the loan.
How I handle this for my clients
As a broker, I can compare pricing across multiple lenders, and look at how a file fits Fannie Mae vs Freddie Mac guidelines. I show my clients the rate menu, the PMI options and the total cost, side by side. You should know exactly why you got the rate you got.
Same borrower, $140 a month apart
Two lenders quoted Chris on the same day. Lender A's rate looked better but included a point and a higher PMI premium. Lender B's rate was slightly higher with no points and a lower PMI quote. Over seven years, Lender B was cheaper by several thousand dollars, despite the higher rate.
Frequently asked questions
Why are conventional rates different between lenders?
Points, pricing adjustments for your score and down payment, Fannie Mae vs Freddie Mac, the PMI company, overlays and timing.
How do I compare mortgage quotes?
Get Loan Estimates the same day for the same scenario, then compare rate, points, credits and PMI over the time you'll keep the loan.
Does PMI cost differ between lenders?
Yes. Premiums vary by insurer and structure.
Why is my rate higher than the advertised rate?
Advertised rates often assume top credit, a large down payment and points.