Our Methodology
How FairRate determines whether a mortgage rate or a set of loan estimate fees is competitive. Every verdict we issue is grounded in publicly available Federal Reserve data, not editorial opinion.
Rate Checker
Data Source
Optimal Blue Mortgage Market Indices (OBMMI)
Published daily by the Federal Reserve Bank of St. Louis (FRED). OBMMI reflects actual locked mortgage rates from lenders participating in the Optimal Blue platform — approximately 35% of all US mortgage originations. Unlike weekly surveys that lag by 5–7 days and use estimated quotes, OBMMI uses transaction-level data from locks that have already been executed.
FRED series used: OBMMIC30YF, OBMMIC15YF, and 10 FICO/LTV segmented series for 30-year conventional loans.
Profile-Specific Benchmarking
A borrower with a 760 credit score and 20% down faces a materially different market rate than one with a 680 score and 5% down. Comparing against an aggregate national average introduces error. FairRate selects the most specific available OBMMI series for each borrower:
| Loan Type | Series Used |
|---|---|
| 30-year fixed, ≥740 FICO, ≥20% down | OBMMIC30YFLVLE80FGE740 |
| 30-year fixed, 720–739 FICO, ≥20% down | OBMMIC30YFLVLE80FB720A739 |
| 30-year fixed, 700–719 FICO, <20% down | OBMMIC30YFLVGT80FB700A719 |
| 30-year fixed, <680 FICO (any LTV) | OBMMIC30YFLV…FLT680 (LTV-split) |
| 15-year fixed | OBMMIC15YF (product composite) |
| FHA 30-year | OBMMIFHA30YF |
| VA 30-year | OBMMIVA30YF |
| Jumbo 30-year | OBMMIJUMBO30YF |
| 5/1 ARM, 7/1 ARM | OBMMIC30YF (conventional composite) |
Verdict Thresholds
Competitive — Within 12 basis points (0.12%) of benchmark
Normal daily fluctuation and lock-timing variation. No action required, though a second quote is always worthwhile.
Slightly Above Market — 13–37 basis points above benchmark
Outside routine variation. Calling your loan officer with the exact gap and OBMMI series citation has a realistic chance of reducing the rate.
Significantly Above Market — 38+ basis points above benchmark
Substantial premium over market. On a $400,000 loan, 38 bps equals roughly $76/month or $27,000 over 30 years. Warrants both negotiation and a competing quote.
Cache and Freshness
OBMMI data is fetched from FRED and cached for up to 24 hours. A background cron job refreshes the cache daily. If FRED is temporarily unavailable, FairRate falls back to the most recent cached data and discloses this on the results page. Results display the exact series ID and data date so users can verify independently.
Loan Estimate Analyzer
What We Analyze
FairRate processes the text of a borrower’s Loan Estimate — the standardized three-page disclosure lenders are required to provide within three business days of a mortgage application. We identify every fee and classify it against typical market ranges.
Fee Categories
Within typical market range for this fee type. Not worth disputing — these fees exist for legitimate operational or regulatory reasons.
Above the typical range. The fee may reflect legitimate costs (e.g., a complex transaction) but warrants a direct question to the loan officer.
A lender-controlled fee (origination, underwriting, processing) that borrowers can often reduce or waive by asking directly. These appear in Section A of the Loan Estimate.
Overall Assessment Verdicts
Clean
All fees are within standard ranges. No flags requiring immediate action.
Some Concerns
One or more fees above typical ranges, or multiple lender fees that together exceed market norms.
Significant Issues
Multiple fees materially above market, or a combination of elevated rate and inflated fees that together represent a meaningful financial risk.
How PDF Text Is Processed
Uploaded PDFs are parsed server-side to extract raw text. If a PDF is image-based or password-protected, text extraction fails and users are prompted to paste the relevant sections manually. Extracted text is stored temporarily to process the analysis after payment, then retained to allow result retrieval via the permanent results URL.
Text is truncated to 12,000 characters before being sent to the analysis model — enough to capture all fee tables on a standard three-page Loan Estimate, while staying within cost-effective token limits.
Independence
FairRate earns no revenue from mortgage lenders, referral networks, or lead generation. Our only revenue is the fee paid by borrowers for each analysis.
We never recommend specific lenders, and our tools are designed to give borrowers accurate data regardless of which lender they are using.
Rate benchmarks come exclusively from the Federal Reserve FRED API — publicly available, independently verifiable data.
We do not sell, share, or use borrower data for any purpose other than completing the requested analysis.
Limitations
FairRate’s verdicts are data-based benchmarks, not guarantees. Market rates move intraday, and a quote that was competitive at 9am may be slightly above market by 3pm. OBMMI data reflects the prior business day’s transactions and is not a real-time feed.
State-level rate variation is not fully captured. OBMMI series are national composites; local market conditions, state transfer taxes, and lender footprint affect individual quotes in ways the benchmark cannot account for.
This tool is intended to inform borrower negotiations — not to replace the advice of a licensed mortgage professional. Always consult a licensed advisor before making mortgage decisions.