Input 01
The 10-year Treasury (the floor)
Mortgage rates loosely track the 10-year Treasury yield, not the Fed funds rate. When the 10-year moves, mortgage rates move within a day or two.
Rates · how they really work
Rates aren't one number.
They're a stack.
Mortgage rates track the 10-year Treasury, but your specific rate is built from your credit, loan type, LLPA pricing, points, and lock day. Here's the anatomy nobody walks you through.
· The rate stack
Five inputs.
One number on the LE.
Input 02
The MBS spread
Mortgages are bundled into Mortgage-Backed Securities. The spread between MBS yield and Treasuries is the second layer. Spreads widen in volatile markets, tightening rates worse.
Input 03
Your credit + LLPA
Loan-Level Price Adjustments (LLPAs) tax loans by credit + LTV + property type. A 660 score on a 95% LTV investment property pays significantly more than a 760 owner-occupied at 80%.
Input 04
Points + credits
Each discount point (1% of loan) typically buys ~0.25% off the rate. Negative points (lender credit) move it the other way. The 'rate' you see is net of these choices.
Input 05
The lock day + window
Daily volatility moves rates within a quarter-point. 60-day locks cost more than 30-day. Your rate is captured at the moment + window you lock.
· Watch-outs
Four ways
buyers get the wrong rate.
Pitfall 01
Believing a teaser rate.
Online ads quote the absolute best-case scenario (super-prime credit, low LTV, paid-down points). Your file is rarely that. Always quote your actual rate via Loan Estimate.
Pitfall 02
Comparing rates from different days.
Lender A quoted 6.50% on Monday; Lender B quoted 6.625% on Wednesday. Different markets. Get all quotes the same day for valid comparison.
Pitfall 03
Ignoring APR.
APR includes lender fees in the rate calculation. Two loans at 6.5% can have very different APRs. APR shows the real cost.
Pitfall 04
Floating into a rising market.
Floating works when rates are stable or falling. In a rising market, every day costs you. See /rate-lock-strategy for the playbook.
Rates are a stack.
Get the right one for your file.
Five minutes. We map your credit + loan type + LLPA exposure and quote you a real rate, not a teaser.