Choosing best execution: BEST_EX, BY_RATE, BY_PRICE
Three pricing modes, three different jobs. Pick the right one and the workspace stops fighting you.
RateStack's pricing engine supports three modes: BEST_EX, BY_RATE, and BY_PRICE. Each is the right answer for a specific job. Mixing them is the most common reason new users find the workspace confusing.
BEST_EX
For each eligible investor, run the full ladder, pick the rate/price combination that maximizes the final price after all adjustments and margin layers, and return that quote. The result is a list of investors ordered by best execution, top to bottom.
Use it when: you have a borrower target rate or a target lock period and you want to find the investor that delivers the best price under those constraints. This is the LO's default workflow.
BY_RATE
Pin a rate. For each eligible investor, return the price ladder around that rate (or just the row at that rate, depending on UI mode). The result is a comparison of investor prices at a single rate.
Use it when: the borrower has explicitly chosen a rate (most often: rate-shopping with a specific number in mind), and you want to know which investor pays the most for that rate. Also: when you're drilling down on a specific quote and want to see the surrounding ladder.
BY_PRICE
Pin a target price (typically 100 or 100.5 — par or a small premium). For each eligible investor, return the rate ladder around that price. The result is the rate the borrower would get from each investor at that price.
Use it when: the borrower is rate-shopping by net cost. They want the lowest rate they can get at zero or a specific premium. Brokers use this mode heavily; correspondent shops use it on rate-buy- down conversations.
Switching modes mid-scenario
The workspace lets you switch modes without losing the loan input. The quote table updates; saved scenarios remember the mode you were in. If you flip from BEST_EX to BY_RATE and the visible top result changes, that is expected — the modes optimize for different objectives.
The wrong way
Running BEST_EX, picking a rate that's not at the top of the ladder, and then asking why the price is low. The answer is: BEST_EX optimized across rates; the rate you picked wasn't the best for that investor. BY_RATE pinned at your chosen rate would tell you the correct comparable.
Worked example
Borrower wants 6.625%. You run BEST_EX and Investor A returns at 6.5% (different rate, better price). Investor B returns at 6.625% (target rate, slightly worse price). The LO might pick A and tell the borrower "you can save 12 bps by going to 6.5%" — that's the right answer because BEST_EX optimized correctly. If the borrower insists on 6.625%, switch to BY_RATE and compare A and B at 6.625% directly.