The price of low credit scores
It pays to have a great credit score — especially if you’re buying or refinancing a home. According to new data, buyers with premium credit scores save more than $30,000 over the life of their loan compared to those with scores on the lower end of the spectrum.Verify your new rate (Jul 13th, 2020)
Rates by score
According to data from LendingTree, buyers with a 760 credit score or higher averaged a 5.12 percent APR on purchase loans for the month of October. Buyers who fell into the 95th percentile of credit profiles — those with super-prime scores — fared even better, averaging an APR of 4.61 percent, well below the month’s average of 5.27 percent.
Those on the lower end of the credit score spectrum saw much higher rates for the month. Buyers with scores of 620 to 629 averaged an APR of 5.86 percent — a difference of 74 basis point over the top credit bracket.
Buyers with 640 to 679 credit scores had an average APR of 5.76 percent, while those in the 680 to 719 range averaged 5.42 percent.Verify your new rate (Jul 13th, 2020)
How a score can save you
All in all, buyers on the bottom end of the credit score spectrum can expect to pay an estimated $263,659 in interest over the course of their 30-year loan. Buyers with premium scores will pay $232,069 — a whopping $31,000 less.
The difference is less stark for buyers with good to fair credit scores. Buyers with scores in the 720 to 759 range will pay about $3,000 more in interest than those with a 760 or higher, while buyers in the 680 to 719 range will pay about $15,000 more.
Homeowners who refinanced also saved serious cash by having premium credit scores. Those with a 760 or higher will pay about $27,000 less in interest than homeowners on the bottom end of the credit bracket.
Get today’s mortgage rates
Want to see what rate your credit score earns you? Then shop around and get today’s mortgage rates today.Verify your new rate (Jul 13th, 2020)