Mortgage borrowers who shopped around last week could’ve saved $42,875 on the life of a $300,000 loan, according to LendingTree's Mortgage Rate Competition Index.
The index measures the spread in the APR of the best offers available on its website. LendingTree derives that savings claim by comparing the amount a borrower would pay out of over the life of a loan at the lowest available interest rate on its site versus the highest available interest rate.
According to the company’s data, although the share of borrowers that received rates under 4.25% moderately edged down, nearly 33% of borrowers received rates under 4.25%, with the index growing to 0.91 for the week ending May 26, 2019.
In fact, the report states that for 30-year fixed-rate mortgages, 32.6% of purchase borrowers received offers under 4.25%, sliding from 36.4% the previous week.
While the rate has fallen, it’s still a significant increase from 2018 when just 0.01% of purchase offers were under 4.25%.
Additionally, the report highlights that across all 30-year, fixed-rate purchase mortgage applications made on LendingTree’s website, 16.1% of borrowers were offered an interest rate of 4.125%, making it the most common interest rate.
When it came to 30-year fixed-rate refinance borrowers, 40.2% received offers under 4.25%, retreating from 42.9% one week prior. Despite this decline, this rate is still significantly up from 2018’s rate when 0% of refinance offers were under 4.25%.
So, with a wider refinance market index of 1.03, the typical refinance borrowers could have saved $48,911 by shopping around for the lowest rate.
According to the report, across all 30-year, fixed-rate refinance applications, the most common interest rate was 4.125%. This rate was offered to 18.8% of borrowers.
This image highlights the distribution of last week's mortgage fees:
(Click to enlarge; Source: LendingTree)
NOTE: The LendingTree Mortgage Rate Competition Index measures the spread in the APR of the best offers available on its website.