When it comes to snagging a home loan, two big names might pop up: Rate (formerly Guaranteed Rate, and owner of the big rate.com domain) and Rocket Mortgage (formerly Quicken Loans). Both are big players in the mortgage game, but which one is actually worth your time? Let’s break it down.
Some basics on both lenders
In 2023, Rocket Mortgage made waves with a jaw-dropping 289,000 loans, totaling $76.26 billion. That puts them right at the top of the heap, the second-largest mortgage lender in the U.S.
Meanwhile, Rate was busy with 56,000 loans worth $20.44 billion, sitting comfortably at number 11. A key difference? Despite the higher-than-usual rates last year, Rocket Mortgage was all about refinancing with 39% of their loans for that purpose. Rate, on the other hand, barely dipped its toes in refinancing, with only 5% of their loans going that route.
We’re certainly curious why Rocket’s refinanced loans accounted for a quarter of their volume—112,710 loans—during a time when rates were among the highest in the last decade. It makes one wonder about the factors that led so many borrowers to refinance under those conditions.
The breakdown
| Lender | Rate | Rocket Mortgage | Tomo Mortgage |
| Founded | 2000 | 1985 | 2020 |
| Lender Fees | $2,969 per loan, including a $150 application fee* | $4,700 per loan* | $0 |
| Average Loan Size | $363,000 | $264,00 | $376,000 |
| On-Time Close Rate | Not reported | Not reported | 98% |
| Customer Reviews | 3.9 stars on Consumer Affairs | 3.8 stars on Consumer Affairs | 5.0 stars on Consumer Affairs 4.95 stars on Zillow |
| Employee Reviews | 3.0 stars on Glassdoor | 3.5 stars on Glassdoor | 4.1 stars on Glassdoor |
How to judge mortgage lenders
- Interest rates: Don’t get fooled by flashy numbers. Always compare the “par rate” with 0 points and check out the APR (Annual Percentage Rate). This is your real cost of borrowing, so get the full picture before signing up.
- Lender fees: Rate and Rocket Mortgage typically have high fees—around $3,000 to almost $5,000 on average. But Tomo Mortgage? No lender fees ever. That’s over $3,000 in savings right there, and we’re proud of it.
- On-time close rate: Here’s how often lenders actually close on the promised date: The industry standard is 40%. But at Tomo Mortgage, we’re proud to achieve a 98% on-time close rate. While other lenders don’t even share this information, we believe it’s a big deal—and it sets us apart.
- Pre approvals: While some lenders don’t take the time necessary to prepare a strong pre approval and offer letter, this is critical to making a successful offer on a new home. Tomo Mortgage’s online pre approval only takes 15 minutes, and it includes a soft credit check—but way more reliable when you’re making an offer on a home.
- Customer satisfaction: If you’re finding it tough to trust what lenders are telling you, one of the best ways to gauge their reliability is by looking at reviews from people who were once in your shoes. Did those customers have a smooth experience with the lender? What went right—or wrong?
- Employee reviews: Employee reviews may not appear to have a direct impact on your loan offering, however, comparing how employees at each company rate working there, can give you an inside look into the company morals, reliability, transparency, and more.
So, Rate or Rocket Mortgage?
If face-to-face interaction is your thing, check if Rate’s 390 branches are in your area. But for most people all that matters is which is the best price. On price, don’t be fooled—both Rate and Rocket Mortgage come with steep lender fees, although Rate’s are a little less hefty. (Here at Tomo Mortgage we have no lender fees).
For most people the most important factor is the rate. We were curious to see how Tomo Mortgage’s APR (annual percentage rate) stacked up against Rocket Mortgage, so we looked at three Zip codes for two weeks on Nerdwallet (where we could compare apples-to-apples on loan scenarios). Using the median home sale price for each location, a credit score range of fair at 680, and with putting 5% down.
In this scenario, from August 7 to August 20, 2024, Rocket’s average APR was 7.64%, while Tomo Mortgage’s average APR was 6.26%.
So, we’re obviously biased, but we’d say don’t choose either. Tomo Mortgage has lower rates, lower fees, and better reviews. It’s a pretty obvious choice.
*sources: Business Insider Mortgage Reviews: Rate, Rocket Mortgage, and HMDA data from 2023
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.