How prominent must mortgage rate disclosures be in an ad

A mortgage ad that highlights an attractive introductory rate can leave out the most useful context unless the other rate periods and APR appear clearly beside it. Regulation Z controls not only which information appears, but how prominently and how close the required disclosures sit to the advertised rate or payment.

When the multiple-rate rule applies

Section 1026.24(f)(2) applies to advertisements for credit secured by a dwelling, other than radio or television ads, when the ad states a simple annual interest rate and more than one simple annual rate will apply during the loan term. The ad must state every rate that will apply, the period each applies, and the APR. Variable-rate examples use a reasonably current index and margin when required.

Equal prominence and close proximity

The rate and period information, plus the APR, must be disclosed with equal prominence and close proximity to the advertised rate that triggered the requirement. The APR may be disclosed with greater prominence. The official interpretation treats same-size text as equally prominent and information immediately beside, above or below the rate—with no intervening text or graphic—as close in proximity. A remote footnote or a faint disclosure separated by promotional artwork can fail the rule.

The electronic-ad provision

The regulation's commentary provides a specific standard for electronic advertisements that disclose rates or payments: compliance with §1026.24(e) is deemed to satisfy the clear-and-conspicuous standard. The ad still has to include the required information and meet the other applicable provisions. Do not turn this formatting provision into a general exemption from rate or payment disclosures.

A simple layout test

1. Confirm the credit is secured by a dwelling and the ad is not radio or television.
2. Check whether a simple annual rate is advertised and multiple rates apply over the loan term.
3. List each rate and the period it applies, plus the APR.
4. Place required disclosures beside the triggering rate, without separating material, and make their presentation comparably prominent.
5. Apply the electronic-ad rule only to its stated context and verify the rest of §1026.24.

Common exam traps

• The rule is triggered by a stated simple annual rate when more than one rate applies, not by every mortgage ad in the same way.
• The APR may be more prominent; it is not allowed to be less visible than required context.
• Equal type size is a deemed safe harbor for equal prominence, not the only possible compliant design.
• A footnote is not close proximity under the interpretation described for this requirement.
• Electronic formatting relief does not remove the requirement to disclose applicable terms.

Key takeaway

When §1026.24(f)(2) applies, show all applicable rates, their periods and APR with equal prominence and close proximity. Keep the disclosures visually tied to the rate that triggered them.