As interest rates move lower, borrowers can unlock some serious savings by gathering more than one quote from a mortgage lender. It may be worth the extra time to gather up to three quotes from mortgage lenders. The average borrower could save $44,500 over the life of their loan by comparison shopping for a mortgage, a new study by LendingTree finds.
In some metro areas, particularly among the nation’s priciest areas, the savings could be even greater. For example, in San Francisco, borrowers who shopped around for a mortgage saved more than $66,000 in interest over the life of their loan. In Fresno, Calif., they could save $61,428, and in Los Angeles borrowers could save $59,810.
Even in cities where savings aren’t as high, borrowers still stand to save. For example, buyers in Pittsburgh had among some of the lowest purchase loan savings in the nation, but 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, 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)