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Study: Borrowers Save Big Shopping for Mortgages

“Oh good, we’re approved,” should be, “I wonder if we can get a lower rate?” By shopping around, the average borrower can save $44.5K over the life of a loan.

NEW YORK – As interest rates move lower, borrowers can unlock serious savings by gathering more than one quote from a mortgage lender, making it worth the extra time it takes to gather up to three quotes from mortgage lenders.

According to a LendingTree study, the average borrower could save $44,500 over the life of their loan by comparison shopping.

In some metro areas, particularly among the nation’s priciest ones, the savings could be even greater. For example, in San Francisco, borrowers who shopped around for a mortgage could save more than $66,000 in interest over the life of their loan. In Fresno, Calif., they could save $61,428, and in Los Angeles they could save $59,810.

Even in cities where home prices aren’t as high, borrowers still stand to save. For example, Pittsburgh buyers had some of the lowest loan savings in the nation, but buyers could still save $23,409 if they shopped around for the best rates, the study showed.

“As interest rates change, so do the savings you could reap from shopping around for a mortgage lender,” the study notes. “Cutting back the total interest paid over the lifetime of a loan may translate into meaningful savings on a yearly and monthly basis.”

For example, home-purchase borrowers could save an average of $125 a month, or about $1,500 a year, by shopping around, the study finds.

 

Source: “LendingTree Study: Cities Where Borrowers Saved the Most By Shopping Around for a Mortgage – Winter 2019,” LendingTree (Jan. 15, 2020)

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