New ranking: Where borrowers can save the most by mortgage rate shopping

Aly J. Yale
The Mortgage Reports contributor

Don’t take the first mortgage rate you’re offered

Buying a home in Cincinnati? Then make sure to shop around for your mortgage rate. According to a new analysis, it could save you nearly $24,000.

Verify your new rate (Oct 24th, 2020)

Cincinnati buyers see the difference

According to analysis from LendingTree, Cincinnati and Houston home buyers see the biggest savings from mortgage rate shopping. In Cincinnati, rates vary by 64 basis points, with a potential savings of $67 per month, $798 per year and $24,000 over the life of the loan.

In Houston, the spread is 61 points, with potential lifetime savings of over $31,000. Other cities with large spreads between the highest and lowest rates included San Antonio, Dallas, Phoenix, Chicago, Philadelphia, Pittsburgh, Boston and San Diego.

In terms of lifetime savings, California borrowers stand to save the most. In San Francisco, potential lifetime savings are just under $100K.

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The power of rate shopping

Even in affordable cities, borrowers stand to gain a lot by shopping around for their mortgage rate. In Detroit, for example, the spread between rates is 45 basis points, adding up to nearly $15,000 in savings over the life of the loan.

Detroit borrowers stand to save the most when shopping for refinance rates, though. With a spread of 72 points, they can save more than $23,000 in interest. Refinance borrowers in San Francisco and San Diego stand to save even more, at $130K and $93K respectively.

This is the easiest city to save a down payment in 

Though the potential savings differ by the individual borrower, location and timing, the bottom line, according to LendingTree’s chief economistTendayi Kapfidze, is that rate shopping can save home buyers cash in the long run.

“As interest rates rise, the amount of money consumers can save by shopping around and comparing offers can change,” Kapfidze said. “If you are shopping for a home in San Francisco, taking the first mortgage offer you receive and not comparing it could cost you nearly $100,000 in interest over the life of your loan. In Cincinnati, it could cost you nearly $24,000.”

Verify your new rate (Oct 24th, 2020)

Get today’s mortgage rates

Don’t risk leaving money on the table. Shop around and compare mortgage rate offers today.

Verify your new rate (Oct 24th, 2020)