Just Don't Look at the Rate, you have to know your Costs and Breakeven Points.

November 3rd (Portland, OR) Rates are starting to fall. When is the Juice Worth the Squeeze on a Refinance? When it comes to mortgage rates, I always picture four homeowners chatting—maybe at a neighborhood BBQ, on the golf course, or sitting around a coffee shop table.

The conversation inevitably turns to rates. Each homeowner proudly shares their number, and the person with the lowest rate usually walks away feeling like the winner. Meanwhile, the person with the highest rate is left wondering if their loan officer could’ve done a better job.

But here’s the thing: the lowest rate doesn’t always mean the best deal.

Let me share a real story that recently crossed my desk.

An elderly couple living in a retirement community in Bermuda Dunes, California, was referred to me by their financial advisor. They’d been working with a lender who had a reputation for “having the lowest rates in the Coachella Valley.” On their cash-out refinance, the lender was offering them a 5.49% 30-year fixed rate with “no cash out of pocket.”

Sounds great, right? A full percentage point below most quotes at the time. Even I was curious.

The couple reached out to me, just wanting another opinion. I encourage everyone to do that—shop around, compare, and make sure you’re getting a fair deal. So I asked them to send me their quote.

When I opened it, my jaw dropped.

The loan amount was $400,000. They were being charged over $10,000 in real fees. The loan officer’s own fee alone was $6,000, and that didn’t include the title insurance, escrow, appraisal, recording, and credit report costs.

So yes, they were being offered a shiny 5.49% rate—but at a steep price.

When the couple asked their loan officer why the fees were so high, he told them not to worry: “It’s not coming out of pocket, so it doesn’t matter.”

That’s where I practically shouted, “Why DOES it matter?!”

Loan officers who talk like this give my industry a bad name. Here’s why it matters: when you finance your closing costs, you’re not avoiding them—you’re just paying them differently.

It’s like buying a refrigerator from Home Depot. You can pay cash, or you can swipe your credit card and tell yourself you “didn’t pay anything out of pocket.” But that refrigerator still costs you money—you’ve just chosen to finance it.

The same thing happens when you roll fees into a refinance. You’re giving up $10,000 in home equity to cover costs, and you’ll be paying interest on that amount for the life of the loan.

So, is the “juice” of the lower rate worth the “squeeze” of those fees?

In this case, absolutely not. It would have made far more sense for the couple to take a rate that was half a percent higher but cost $5,000 less. That’s real savings—money that stays in their pockets instead of being buried in their loan balance.

Time and time again, I see lenders bait borrowers with a low rate and then gloss over the details. Sure, the fees are technically listed on the federally required Loan Estimate—but they’re often buried in size-8 font and surrounded by confusing language. Unless a borrower knows what to look for, it’s easy to miss what’s really going on.

Borrowers often assume their loan officer is looking out for them, and many are. But others lean on the trust people naturally place in them—and that’s where folks get taken advantage of.

So, here’s the one thing I hope you remember from this article:

Any lender can get you any rate you want.

The question is: What are you paying for that rate?

When you’re shopping for a mortgage, be bold enough to ask your lender to show you the breakeven point between rate options. If you pay more upfront for a lower rate, how long will it take before that savings actually outweighs the cost? Sometimes the math works—but many times it doesn’t.

That’s why, when I work with clients, I never show just one rate. We look at a grid of options and talk through each one—how much it costs, how long the breakeven takes, and what makes the most sense for their goals. It’s not about chasing the lowest number; it’s about finding the smartest long-term fit.

In the mortgage world, knowledge isn’t just power—it’s money. Literally thousands of dollars can be saved (or lost) depending on how well you understand the rate-versus-cost equation.

So, the next time mortgage rates come up at the BBQ, the golf course, or the coffee shop, remember: the lowest rate doesn’t automatically mean the best deal.

You don’t have to know every answer, but if you know which questions to ask, you’ll always stay in control.

And when you do that, you’ll walk away not just with bragging rights—but with confidence that the juice was actually worth the squeeze.