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Spring is traditionally one of the best times of the year to buy a home. It’s easier to view homes in the warmer weather, and parents can often time a home purchase to coincide with a summer move. Unfortunately, though, today’s mortgage interest rates aren’t as attractive this spring as they were in late February, when they dipped to under 6% on average.
Since that point, the Iran conflict and broader economic uncertainty have pushed bond rates up, and mortgage rates have followed suit. In turn, mortgage rates are now averaging about 6.4%. Meanwhile, the Federal Reserve held the benchmark rate steady at its March meeting, which it is widely expected to do again at its meeting later this month.
Not surprisingly, some homebuyers are now pausing their plans. Those who are still in the market, though, are looking for the best deals possible to save money, and while some mortgage loan options may look generous on the surface right now, if you dig deeper, they could actually cost you more than they save.
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3 sneaky mortgage loan traps to avoid this spring, according to experts
We asked mortgage experts to identify the most common loan traps you should watch for this spring. Here’s what they say to keep an eye out for now:
The no-closing-cost trap
One mortgage loan trap you might encounter is a no-closing-cost mortgage. These mortgage loans can sound appealing because closing costs run 2% to 5% of the loan amount. But not so fast, says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation.
“With a ‘no cost option,’ you pay a higher rate for the lender to pay for your costs,” Schachter says.
While minimizing closing costs could be beneficial, a higher mortgage rate of 6.75% to 7% may cost you significantly more over the life of your loan. Accepting a higher rate might have made sense one year ago because rates were expected to drop, giving you a higher chance of refinancing quickly. That’s not the case in 2026, though, with the Fed generally expected to hold rates steady through much of the year.
“Don’t count on a refinance in the near future due to the volatility in the market,” Schachter says.
Before you accept a no-closing-cost offer, ask your lender to show you the total loan cost so you can determine how long it would take for the high-rate tradeoff to be a good option. If you plan to sell or refinance after that point, the no‑closing‑cost loan may save you money. Otherwise, paying closing costs now is likely the cheaper option.
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The discount points trap
With mortgage rates jumping recently, mortgage lenders are now competing harder for your business. Advertising a below-market rate is one way to do it, but just keep in mind that the rate likely requires buying mortgage discount points to get it.
“One trap is a lender quoting a rate, not the total cost, meaning points versus no points,” says Melissa Cohn, regional vice president of William Raveis Mortgage.
In other words, the advertised rate may not be the rate you actually get unless you pay for discount points to buy it down. Mortgage discount points are upfront fees you pay at closing to buy down your interest rate. One point typically costs about 1% of your loan amount, so you’d generally pay $1,000 for each discount point on every $100,000 you borrow.
“Paying high upfront fees, discount points, for a rate is pre-paying interest up front that may not be realized,” says David Hyde, senior home loans sales manager at BOK Financial. “If rates come down and you refinance, those fees stay with the lending originator, and you start all over again.”
So, be sure to check the fine print on the mortgage offers you get for a more complete picture. You should also ask the lender for the rates with zero points calculated in. That way, you can compare it against competing offers and run the numbers to determine your break-even point.
The builder buydown trap
If you’re purchasing a new construction home, you may run across offers for buydown financing. As of late 2025, about two-thirds of builders were using sales incentives, including rate buydowns, the highest share since the pandemic.
In this scenario, the builder offers either a permanent or temporary rate reduction to incentivize buyers to purchase a home. With the permanent rate buydown, the lower rate lasts for the loan’s full term. A temporary buydown only lasts for the first one to three years, though, with the rate climbing after the promotional period ends.
“If the seller is giving some type of credit or incentive, ultimately it has been worked into the price,” says Craig Garcia, president at Capital Partners Mortgage. “And unlike a resale situation, the option will likely not be there of accepting market interest rate terms at a reduced price, as the builder wants to make sure the prices remain where the builder set them.”
If you have a temporary buydown, your monthly payment will increase once the rate buydown period expires.
“I would recommend asking the builder if they didn’t get a teaser rate or a lower interest rate, can they get a better price on the home?” says Schachter.
If the builder won’t compromise, compare what the total loan costs would be with the buydown versus without it.
The bottom line
What these mortgage traps have in common is that each is designed to make it financially easier to afford the home, which can be beneficial depending on your situation. Remember, though, that the savings are likely temporary. The lender may offset those savings by charging you a higher rate, adding fees at closing or rolling those costs into the purchase price.
Shopping and comparing mortgage rates is always one of the smartest strategies if you want to find a low rate with favorable terms. When you’re evaluating mortgage offers, ask the lender to show you the total cost of the loan, not just the rate and the monthly payment, to make sure you’re comparing the true cost of each loan.
