LESSON 4 OF 6
Look past the rate
Compare the whole offer on the same footing.
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A lower interest rate can come with a higher upfront cost. Start with matching loan amounts, terms and loan types. Then compare points, lender charges, credits, total payment and cash to close. Ask whether each quote is locked and what assumptions it uses.
Use the points tool to screen how an added upfront cost compares with a payment change. Then ask about remaining balances, your planned time in the loan and what else you could do with the cash. The lowest displayed payment is not automatically the lowest cost.
MAKE IT CONCRETE
Illustration: paying $3,000 more upfront for a $50 monthly payment reduction gives a simple screening period of 60 months. That does not account for every cost or future change.
Your turn
Write three questions you would ask before accepting the lower rate. Use the CFPB Loan Estimate explainer to locate the items you want to compare.
Check your understanding
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Learning reference: CFPB consumer education. Checked September 16, 2026. Examples are hypothetical.