Compare loan offers

• Cost is what the loan itself costs: points and lender fees (section A) and the services the lender picks (section B) at closing, minus lender credits, plus the interest and mortgage insurance paid each month. Principal is left out: it repays what you borrowed, and whatever is left is paid off when you sell or refinance.
• Ranking rule: the offer with the lowest cost over the years you choose comes first. Nothing else changes the order.
• Break-even: when one offer costs more at closing and less each month, the month its running cost drops to the other’s. It compares interest, not whole payments, because part of each payment repays the loan.
• Cash at closing, compared adds what you pay the lender at closing to the down payment, for the same home price, so a smaller loan shows the bigger down payment it needs.
• Assumed: the rate stays fixed for the whole loan; payments are made on schedule, with nothing extra toward principal; mortgage insurance is the amount typed, for the years typed. Dollars are added as paid, with no adjustment for inflation or for what cash could earn elsewhere.
• Left out: services you can shop for (section C), taxes, prepaid items and escrow. If they differ between offers, compare them on page 2.
• Figures marked ≈ are this page’s math. The Loan Estimate is the lender’s official disclosure.

From the Consumer Financial Protection Bureau (CFPB):

• “Points lower your interest rate, in exchange for paying more at closing. Lender credits lower your closing costs up front, in exchange for a higher interest rate.”
• “One point equals one percent of the loan amount.”
• If you’re unsure, “ask a loan officer to show you two different options (with and without points or credits) and to calculate the total costs over a few different possible timeframes. Choose the shortest amount of time, the longest amount of time, and the most likely amount of time you can see yourself keeping the loan.”
• “When comparing offers from different lenders, ask for the same amount of points or credits from each lender.”

Source: CFPB, “How should I use lender credits and points (also called discount points)?” (opens in a new tab), last reviewed Oct 19, 2023.

The Loan Estimate describes the APR as “Your costs over the loan term expressed as a rate. This is not your interest rate.” (§1026.37(l)(2) (opens in a new tab)). The CFPB: “The APR reflects the interest rate, any points, mortgage broker fees, and other charges that you pay to get the loan,” and “Don’t look at the APR alone in determining what loan makes the most sense for your circumstances” (“What is the difference between a mortgage interest rate and an APR?” (opens in a new tab), last reviewed Aug 28, 2026). This page shows the APR you type; it doesn’t compute one.

• Loan amount and interest rate: page 1, Loan Terms (§1026.37(b) (opens in a new tab)). Loan term: page 1, at the top.
• Mortgage insurance, and the years it’s charged: page 1, Projected Payments (§1026.37(c) (opens in a new tab)).
• Origination charges: page 2, the section A total. Points are its first line, “% of Loan Amount (Points)” (§1026.37(f)(1) (opens in a new tab)).
• Services you cannot shop for: page 2, the section B total (§1026.37(f)(2) (opens in a new tab)).
• Lender credits: page 2, section J, shown as a negative number (§1026.37(g)(6)(ii) (opens in a new tab)).
• APR: page 3, Comparisons (§1026.37(l)(2) (opens in a new tab)).

The CFPB’s Loan Estimate Explainer (opens in a new tab) walks through a sample form. Once you have a Closing Disclosure, check it against the Loan Estimate.