Tomo Mortgage aims to hold the mortgage industry accountable for inflated rates, hidden fees and misleading pricing that will cost U.S. homebuyers $11 billion in 2025
NEW YORK, May 1, 2025 -- Tomo Mortgage, the fast-growing AI-powered digital mortgage lender, today announced the launch of TrueRate, a free tool that gives U.S. homebuyers a full and honest view into what hundreds of lenders are actually charging people just like them. Deceptive marketing practices and misleading prices are expected to cost American homebuyers $11 billion in 2025 — and TrueRate aims to put a stop to it. It uses data from hundreds of thousands of real home loans from over 1,000 lenders to answer a question that every homebuyer struggles with, but until now has been impossible to answer: What's a good rate for me, right now, and where can I get it?
"Everyone knows how challenging the current homebuying market is, but what many don't know is that many lenders are making it worse with bait-and-switch sales tactics and misleading fees," says Greg Schwartz, CEO and Co-Founder of Tomo. "The mortgage industry thrives on this type of 'confusion capitalism,' where homebuyers have no way to know what's fair and what's a ripoff, and end up having to take a lender's word for it. TrueRate is finally exposing these massive price differences to make it extremely difficult for lenders to overcharge homebuyers and pressure the industry to compete more fairly."
Using AI to uncover hidden mortgage costs and compare rates apples-to-apples
The TrueRate tool tells homebuyers what is a low (good) rate, an average rate and a high (bad) rate for them right now, and which lenders are historically likely to give them a rate in these ranges. Using AI, TrueRate models a homebuyer's "true rate"—the rate they should be getting—based on their location, home purchase price, down payment and credit score. Mortgage lenders can't pay to advertise their rates on TrueRate—and Tomo Mortgage holds itself to the same ranking criteria as every other lender.
"TrueRate is an essential research tool — it uses AI to analyze hundreds of thousands of real-world mortgages to give homebuyers fair and accurate comparisons. At a time when the gap between a good and bad rate is widening, it's never been more important to check TrueRate," explains George Robinson, Chief Data Scientist at Tomo.
The gap between a "good rate" and a "ripoff rate" is widening
New research from Tomo Mortgage sheds light on the scale of rate confusion among U.S. consumers, and the pervasiveness of "dirty lenders tricks" like point traps, how loan officers can game the information they show in a loan estimate, and the dubious claim of a "free refi" down the line. In 2018, the gap between a "good rate" and a "ripoff rate" was $80 per month, but has since jumped more than 350% to $287 per month.
Tomo Mortgage's research also revealed that consumer mortgage confusion goes beyond interest rates. A survey of 500 recent homebuyers uncovered major knowledge gaps that point to how many lenders are able to take advantage of buyers who don't have access to transparent pricing information:
- Only 30% of homebuyers could explain what an "origination fee" was, even though it's extremely likely they just paid thousands of dollars for one.
- 50% of new homebuyers purchased rate points, but only 27% of buyers can explain what they actually are.
- Only 40% of recent homebuyers understand what an "APR" (Annual Percentage Rate) is, and only 38% know what a "rate lock" is — both terms being vital to understand during the mortgage shopping process.
- 37% of recent homebuyers believed that lenders who historically offer some of the highest mortgage rates and fees offered the best prices; only 8% identified lenders with historically low rates and fees.
"The rate ripoff is putting affordable homeownership further out of reach for Americans, and until now, homebuyers have had no way of knowing if they're getting a good deal," adds Schwartz. "At Tomo Mortgage, we've used AI to make getting a mortgage faster, more accurate and less expensive. But our goal with TrueRate is bigger than Tomo Mortgage. We want to help buyers find a great mortgage – even if it's not with us."
To learn more about TrueRate, visit tomo.com/truerate
About Tomo Mortgage
Tomo Mortgage is an AI-powered digital mortgage company on a mission to get rid of the greed and complexity in lending, saving homebuyers thousands of dollars. Its continuous automation platform makes the lending process faster, less frustrating, and far less expensive. By passing those savings on to homebuyers, Tomo Mortgage is able to eliminate the excessive fees and over-inflated rates that cost U.S. homebuyers billions of dollars each year.
To learn more about Tomo Mortgage and its "Low rates, no gotchas" approach, visit tomo.com.
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