Rate Factors

When a lender sells your loan to Freddie Mac or Fannie Mae, the price they get depends on the loan's risk profile. Freddie Mac publishes a grid of price adjustments — in points, where 1 point equals 1% of the loan amount — based on credit score, loan-to-value ratio, and other risk factors. Lenders pass these adjustments through to your rate, which is why two borrowers closing the same day on the same loan amount can get different rates.

The largest adjustment comes from a two-dimensional table: your credit score band (nine bands, from below 640 to 780+) crossed with your loan-to-value band (nine bands, from 30% or less to above 95%). Lower score and higher LTV both push the adjustment up — the worst-priced combination in this data set is over 1.7 points on a purchase, versus zero for the best-qualified combination.

Beyond the base grid, specific loan features each add their own published adjustment: investment properties and second homes carry the largest additions (over 4 points at some LTVs), followed by condos, 2-4 unit properties, manufactured homes, and adjustable-rate loans. These stack additively with the base grid — the breakdown above shows each one that applies to your selections.

Points are a price, not a rate. Converting a price adjustment into a rate change is itself an approximation — lenders use it to decide between charging it upfront (points/fees) or building it into a higher rate over the loan's life. This tool uses an adjustable rule-of-thumb ratio (default 0.25 rate-percentage-points per price point) so the conversion is an explicit, visible assumption rather than a hidden one.

Your loan amount as a percentage of the home's value — equivalently, 100% minus your down payment percentage. A 20% down payment means an 80% LTV: the lender is financing 80% of the purchase price, and your equity covers the other 20%. Lower LTV means more of your own money in the deal, which lowers the lender's risk and, as the base grid above shows, your price adjustment.

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home, much like a second mortgage. Taking one out alongside your primary loan is called secondary financing — it raises your combined leverage against the home beyond what the first mortgage's LTV alone shows, which is why it carries its own separate price adjustment in the grid.

This tool shows Freddie Mac's published baseline adjustments — the floor lenders build from. Individual lenders add their own margin, operational costs, and sometimes stricter "overlays" (e.g., a higher minimum credit score than Freddie requires). Two lenders quoting the same borrower can still land on different rates. Always compare actual quotes.

Loans above the standard conforming limit but within the higher county-specific "super conforming" limit carry additional adjustments not modeled here, since that depends on the property's specific county. Freddie Mac's separate Custom Mortgage Insurance Options table — an alternative way to structure PMI pricing — also isn't modeled; this tool assumes standard, lender-paid-at-closing pricing.

Freddie's grid publishes a separate adjustment for loans underwritten using an alternative credit-score calculation method (rather than a standard FICO score) — a narrow case that isn't surfaced as an input here to keep the tool focused on the factors that affect most borrowers. Ask your lender if it applies to your situation.

The "today's baseline rate" above is Freddie Mac's weekly Primary Mortgage Market Survey average — a blend across many borrower profiles, not a zero-adjustment starting point. Adding your points-based adjustment to that average is an illustrative approximation, not a precise stack. It's most useful for comparing scenarios against each other, less so as an exact quote.