How to Compare Rates: Cut Through The Camouflage

Make sure points aren’t disguising high rates

When reviewing rate charts, one of the first things to understand is points. Paying points means making an upfront payment to lower your interest rate over the life of your loan. This can make sense if you plan to keep the loan long enough to recoup the cost through lower monthly payments.

Not all rate charts are created equal. For example, as referenced here, an IRRRL refinance advertised by a well-known national VA lender (VU) may show a low rate—but it often requires paying multiple points upfront. Meanwhile, Ryan’s current option loan with no points (or very low points) can offer a lower interest rate and APR* immediately, resulting in a lower overall cost without the large upfront investment. And if you do want to pay points, Ryan can get you an even lower rate. Always compare the interest rate and APR at the same point level to see the true savings.

Every lender can structure a loan how you like: no points, some points, more points, or even a lender credit. The key is an apples-to-apples comparison: check the interest rate, APR, fees, and points at the same level. That way, you’re comparing the real cost of the loan—not just the flashy charted rate.

By understanding these elements, you can make an informed decision and potentially save thousands over the life of your loan.

*APR (Annual Percentage Rate) is the true yearly cost of a loan, including interest plus certain fees and charges. It gives a more complete picture than the nominal interest rate, letting you compare loans “apples to apples.”