What par means
Par commonly describes the rate with no discount-point charge and no rate-based lender credit on that particular pricing basis. Ask whether the quoted basis includes broker compensation and all applicable adjustments — that single question removes most of the confusion in a rate conversation.
Points down, credits up
Discount points are an up-front charge used to obtain a lower interest rate. A higher-rate option can generate a pricing premium that supports a lender credit toward closing costs. This rate-and-cost tradeoff applies across every business model — bank, credit union, retail lender, correspondent and broker alike.1
The price assigned to the loan changes as the interest rate changes. That does not mean the loan officer receives more compensation for moving you to the higher rate. Company pricing and originator pay are separate subjects, and the law keeps them that way.4
The question that makes a quote real
There is one request that turns a rate quote into something you can compare: “Show me this same loan at par, with the points, and with the credit — and what each costs me over five years.” Any loan officer who cannot produce that comparison is not really quoting you.
Sources
These references support the factual explanations above. Where this page states a preference rather than a fact, it says so — those are our editorial judgement, not a claim that any one channel always costs less.
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