Mortgage

Homebuyers, you could have saved $44,353 by shopping around for a mortgage last week

Last week, 42.3% of borrowers received rates under 4.25%

Mortgage borrowers who shopped around last week could’ve saved $44,353 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, the share of borrowers who received rates under 4.25% ticked up to 42.3%, with the index growing to 0.94 for the week ending June 2, 2019. 

Although this percentage is only slightly up from last week’s 32.6%, it significantly surpasses 2018’s rate when just 0.06% of purchase offers were under 4.25%.

Notably, the report highlights that across all 30-year, fixed-rate purchase mortgage applications made on LendingTree’s website, 13.5% of borrowers were offered an interest rate of 4%, making it the most common interest rate.

When it came to 30-year fixed-rate refinance borrowers, 52% received offers under 4.25%, rising from 42.9% one week prior. Once again, this rate is still up from 2018’s rate when 0.02% of refinance offers were under 4.25%.

So, with a wider refinance market index of 1.10, the typical refinance borrower could have saved $52,504 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 18.9% of borrowers.

This image highlights the distribution of last week's interest rates:

 (Click to enlarge; Source: LendingTree)

LendingTree: Mortgage competion index

NOTE:  The LendingTree Mortgage Rate Competition Index measures the spread in the APR of the best offers available on its website.

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