An interest rate at PAR would be?

An interest rate at PAR refers specifically to the rate with no yield spread premium (YSP) involved. When a loan is said to be at PAR, it means that the lender is not offering a discount or charging additional points for the loan; thus, the interest rate reflects only the market rate set by the current economic conditions without any adjustments for lender profit or costs.

This is an important concept in the mortgage industry, as it helps consumers understand the distinction between nominal interest rates and those that are adjusted for various fees or incentives such as YSPs. When borrowers evaluate different loan offers, recognizing a rate at PAR helps them gauge what they can expect to pay without hidden costs or premiums.

Other options do not accurately capture the essence of a PAR interest rate. The first option conflates the definition by including fees unrelated to YSP. The third option references a different category of borrowers rather than the general market standard. Finally, the fourth choice presents a misleading scenario around advertising practices that involve points, not reflecting the straightforward nature of a PAR rate. Understanding these distinctions is crucial for making informed decisions in mortgage transactions.