Mortgage rate shopping especially effective in these U.S. cities

Where rate shopping works

Mortgage rate shopping can save home buyers immensely on their loans, but apparently, it doesn’t stop there. According to a new analysis from LendingTree, rate shopping in certain markets can save even more.

Tampa takes the cake

LendingTree’s analysis found that rate shopping in Tampa, Florida, ushers in the biggest share of savings. Buyers in Tampa save $67 per month on a $225,000 home purchase – or about $800 per year. Over the life of their loan, they save around $17K.

Kansas City, Portland and New York were tied for second. Buyers in Kansas City save around $705 per year by rate shopping, while those in Portland save just under $1,000.

In terms of total savings, California markets show the highest dollar-value saved as a result of rate shopping – likely because home prices require much larger loans. San Francisco buyers average $65K in savings due to rate shopping – the equivalent of about $254 per month. Buyers in Los Angeles and San Diego save around $42K on their loans.

Refi returns

When it comes to saving on refinance loans, New Orleans homeowners come in tops. They save $71 per month and $856 per year by shopping around for rates.

Homeowners in Salt Lake City and Indianapolis also see big savings through refi rate shopping. San Francisco, San Diego and Los Angeles homeowners enjoy the biggest dollar-value savings on refinance loans.

Shopping for a mortgage: mortgage rates vs. mortgage fees

According to LendingTree’s research, the number of banks and financial institutions in a market heavily influence the impact of rate shopping.

“Our findings revealed that in the refinance market, cities with fewer bank branches had wider spreads in rates,” LendingTree reported. “This relationship did not hold for purchase mortgages. Refinance transactions tend to be more price sensitive, as the loan is the primary product.”

How can I shop for a mortgage when lenders won’t provide a loan estimate?

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Rate shopping can help you get the best deal on your mortgage loan. Shop around and see what rates you qualify for today.