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How Much Does Great Credit Really Save for Borrowers?

Average percentage rates for mortgage loans were up in March compared to February, according to a new report by LendingTree.

In March, average APR offers for borrowers with the best profiles were 4.25 percent for conforming 30-year fixed purchase loans. That's up from 4.22 percent in February. Refinance loan offers were up 11 points to an almost-even 4.24 percent last month as well.

For the typical borrower, APR offers in March were at 4.85 percent, which is five points higher than in February. That made the average down payment in March about $63,000, with an average loan of almost $238,600. With an average loan-to-value ratio (LTV) of 82 percent, that spelled an average lifetime interest payment of $214,600 for the typical borrower.

“The loan note rate hit the highest since March 2016 at 4.75 percent and was also up 5 basis points from February,” the report stated.

Consumers with the highest credit scores (760+) saw offered APRs of 4.72 percent in March. That compared to 4.99 percent for consumers with scores of 680 to 719. That gap of 27 basis points represents $14,000 in extra costs for borrowers with lower-that-top credit scores over 30 years. It also was unchanged from February and still near the widest since this data series began in April 2016, according to LendingTree.

On the refinance side, refi APRs for conforming 30-yr fixed loans were up 6 basis points in March, to finish the month at 4.83 percent. As it was for standard mortgage borrowers, the credit score bracket spread remained at 24 basis points between the top-tier borrowers and those a little further behind them. Factoring in interests and fees, that spells almost $13,000 in extra costs over the life of the loan for lower credit score borrowers. That's based on an average refinance loan of $239,668, where the LTV is above 60 percent.

Average proposed purchase down payments was little changed at $62,758.

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

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