We are not aware of specific language that must be used when disclosing that advertised mortgage rates are subject to change based on factors such as a credit score and loan-to-value ratio, and Regulation Z does not include any sample or model language for such a disclosure. As a reference, the resources below include two examples of language used in bank mortgage advertisements describing various factors that may change an advertised mortgage rate.

Regulation Z requires lenders to disclose that an advertised or disclosed date may vary based on a borrower’s creditworthiness or other factors only for a handful of loan types, such as private education loans (not home-secured), as well as open-end credit that is not home-secured. For mortgage loans, we are not aware of any requirements to state that the advertised rate will vary based on the borrower’s creditworthiness or other factors, other than the general requirement when advertising open-end home-secured plans to disclose that the advertised terms are “subject to change.”

Of course, it may be advisable to include a disclaimer when advertising mortgage rates on your website to avoid misleading mortgage loan applicants and to comply with the general requirement that mortgage advertisements include only rates that are “actually available.” 

For resources related to our guidance, please see:

• Regulation Z, Private Education Loans, 12 CFR 1026.47(a)(1)(i) (“(a) A creditor shall provide the disclosures required under paragraph (a) of this section on or with a solicitation or an application for a private education loan. (1)(i) The interest rate or range of interest rates applicable to the loan and actually offered by the creditor at the time of application or solicitation. If the rate will depend, in part, on a later determination of the consumer's creditworthiness or other factors, a statement that the rate for which the consumer may qualify will depend on the consumer's creditworthiness and other factors, if applicable.”)

• Regulation Z, Official Interpretations, Open-End Credit Advertising (not home-secured), Paragraph 16(g), Comment 5 (“Post-promotional rate depends on consumer’s creditworthiness. For purposes of disclosing the rate that may apply after the end of the promotional rate period, at the advertiser's option, the advertisement may disclose the rates that may apply as either specific rates, or a range of rates. For example, if there are three rates that may apply (9.99%, 12.99% or 17.99%), an issuer may disclose these three rates as specific rates (9.99%, 12.99% or 17.99%) or as a range of rates (9.99%-17.99%).”)

• Regulation Z, 12 CFR 1026.40(d)(2)(i) (“The creditor shall provide the following disclosures, as applicable: . . . A statement of the time by which the consumer must submit an application to obtain specific terms disclosed and an identification of any disclosed term that is subject to change prior to opening the plan.”)

• Official Interpretations, 12 CFR 1026, Paragraph 40(d)(2)(i), Comment 1 (“The requirement that the creditor disclose the time by which an application must be submitted to obtain the disclosed terms does not require the creditor to guarantee any terms. If a creditor chooses not to guarantee any terms, it must disclose that all of the terms are subject to change prior to opening the plan. The creditor also is permitted to guarantee some terms and not others, but must indicate which terms are subject to change.”)

• Regulation Z, 12 CFR 1026.24(a), Closed End Credit Advertising (“Actually available terms. If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor.”)

• Bank of America website (“Interest rates and annual percentage rates (APRs) are based on current market rates, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score, refinance with cash out and other variables—call for details. This is not a credit decision or a commitment to lend. Mortgage insurance may be required depending on loan guidelines. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Additional loan programs may be available.”)

• Chase website (“These assumptions are subject to change without notice. Rate, points and APR may be adjusted based on several factors including, but not limited to, state of property location, loan amount, documentation type, loan type, occupancy type, property type, loan to value and your credit score. Your final rate and points may be higher or lower than those quoted based on information relating to these factors, which may be determined after you apply.”)