Home >> Daily Dose >> The Life of a Mortgage: How Much Can Smart Shoppers Save?
Print This Post Print This Post

The Life of a Mortgage: How Much Can Smart Shoppers Save?

A little legwork can go a long way … and in this case, to the tune of $63,000-plus.

A new study of 50,000 LendingTree users has found that despite rising mortgage rates, borrowers can save more that $63,000 over the life of a mortgage, when they shop around and compare offers. The study calculated how much borrowers in each of the nation’s 50 largest metros could save if they chose the lowest annual percentage rate (APR) they were offered instead of the highest.

“Borrowers in the nation’s 50 largest metros can save an average of $63,151 over the lifetime of their loans by shopping around for a mortgage,” found the study. “That breaks down to about $2,100 a year, or around $175 a month.”

Across the 50 metros polled by LendingTree, the average spread between the highest and lowest APR offered to borrowers was found to be 82 basis points.

The study analyzed data from 50,786 users of LendingTree’s online shopping platform who received three or more offers for 30-year, fixed-rate mortgages, from lenders from May 1 through May 31, 2022.

Borrowers in San Jose, San Francisco, and Los Angeles borrowers were found to save the most over the lifetime of their mortgages. Across these metros, borrowers were projected to save an average of $109,185 over the lifetime of their loans. Borrowers in Riverside, California; Raleigh, North Carolina; and Hartford, Connecticut saw the largest spreads between the average lowest and highest APR offered. In these metros, the spread is 90 basis points, which was eight basis points above the 50-metro average.

The 10 metros where borrowers were found to save the most by shopping around for a mortgage include:

1. San Jose
Average lowest offered APR: 4.97%
Average highest offered APR: 5.80%
Spread between average lowest and average highest APR: 0.83%
Lifetime savings: $125,645

2. San Francisco
Average lowest offered APR: 5.02%
Average highest offered APR: 5.85%
Spread between average lowest and average highest APR: 0.83%
Lifetime savings: $106,024

3. Los Angeles
Average lowest offered APR: 5.11%
Average highest offered APR: 5.95%
Spread between average lowest and average highest APR: 0.84%
Lifetime savings: $95,886

4. San Diego
Average lowest offered APR: 5.10%
Average highest offered APR: 5.96%
Spread between average lowest and average highest APR: 0.86%
Lifetime savings: $95,884

5. Seattle
Average lowest offered APR: 5.03%
Average highest offered APR: 5.89%
Spread between average lowest and average highest APR: 0.86%
Lifetime savings: $92,229

6. Boston
Average lowest offered APR: 5.10%
Average highest offered APR: 5.94%
Spread between average lowest and average highest APR: 0.85%
Lifetime savings: $85,405

7. Washington, D.C.
Average lowest offered APR: 5.11%
Average highest offered APR: 5.96%
Spread between average lowest and average highest APR: 0.85%
Lifetime savings: $79,567

8. New York
Average lowest offered APR: 5.13%
Average highest offered APR: 6.01%
Spread between average lowest and average highest APR: 0.88%
Lifetime savings: $78,492

9. Denver
Average lowest offered APR: 5.09%
Average highest offered APR: 5.97%
Spread between average lowest and average highest APR: 0.88%
Lifetime savings: $77,077

10. Portland, Oregon
Average lowest offered APR: 5.03%
Average highest offered APR: 5.91%
Spread between average lowest and average highest APR: 0.88%
Lifetime savings: $76,887

LendingTree noted that it didn’t compare the single lowest and single highest APRs offered to users in each area when calculating the potential monthly payments. Instead, it compared an average of the lowest and average of the highest APRs offered to individual users to come up with its findings.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
x

Check Also

Mortgage Rates Fall for Third Consecutive Week

Riding the hopes that the Federal Reserve will slow its pace of rate hikes, Freddie Mac reported that the 30-year, fixed-rate mortgage fell yet again, as house prices soften with 2022 coming to a close.