A 0.25% rate difference feels small. On a $400,000 loan it is about $65/month. Over 30 years it is $23,400. This calculator turns a quoted rate spread into its real-dollar impact so you know whether to switch lenders.
Worked example: $400,000 loan, 30-year fixed. Lender A quotes 6.875%. Lender B quotes 7.125%. Monthly P&I difference: $67. Lifetime difference: $24,100. That is a year of college or a good used car — absolutely worth the week of paperwork to switch.
How much rate difference should trigger a switch?
- 0.125% — meh. Probably not worth re-documenting if you're already in underwriting.
- 0.25% — usually worth switching before lock.
- 0.375%+ — always switch. Run from any lender who refuses to match.
Apples-to-apples rate comparison
A low rate with 2 points is not the same as a low rate with no points. Always compare rates at the same point structure. Best practice: get Loan Estimates with "par rate, no points" from 3+ lenders. Then you can compare apples to apples.
Lender credits vs rate
Most lenders offer a matrix: you can take a lower rate with points, par rate with no points, or higher rate with lender credit toward closing costs. The value per point/credit varies wildly between lenders. Always ask for the full matrix.