A “rack rate” is colloquial expression for a mortgage rate that is not sufficiently discounted.
People who simply sign their lender’s renewal form, for example, are often given the lender’s rack rates (i.e. rates that are higher than the lender’s best rates).
The term is derived from hotel parlance, where “rack rate” describes a hotel’s full published rate without discounting.
Almost no one pays rack rates today unless they fail to shop around, or cannot qualify with discount lenders.