Though rising mortgage rates have made homebuying considerably more expensive than at the start of the year, shopping around for a mortgage and comparing offers from different lenders can help borrowers save a significant amount of money, according to a new mortgage shopping study out by LendingTree this week.
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. That breaks down to about $2,100 a year, or around $175 a month, the report states.
Here are some additional key findings:
- Borrowers in the California cities of San Jose, San Francisco and Los Angeles can save the most over the lifetime of their mortgages. Across these metros, borrowers can save an average of $109,185 over the lifetime of their loans.
- Across the 50 metros, the average spread between the highest and lowest APR offered to borrowers is 82 basis points.
- Riverside, California, Raleigh, North Carolina, and Hartford, Connecticut, borrowers see the largest spreads between the average lowest and highest APR offered. In these metros, the spread is 90 basis points
LendingTree’s Senior Economic Analyst and report author, Jacob Channel, commented, “Even in an environment where mortgage rates are rising—as they are now—shopping around can still help borrowers find lower rates and save money. In fact, shopping around for a mortgage is arguably even more important when rates are rising because doing so can help borrowers alleviate some of the extra costs that could otherwise make buying a home unaffordable.”
LendingTree said it analyzed data from more than 50,000 users who received three or more offers from mortgage lenders in May 2022. They calculated how much borrowers in each of the nation’s 50 largest metros could save if they chose the lowest APR they were offered instead of the highest.
To view the full study, click here.