Which US Cities Provide Greatest Savings by Shopping Around for a Mortgage?

LendingTree®, the nation’s leading online loan marketplace, today released its report on where borrowers can save the most by shopping around for mortgage loans.

As interest rates rise, the amount of money consumers can save by shopping around and comparing offers can change. To help consumers understand how much they can save, LendingTree created a Mortgage Rate Competition Index that measures the basis point spread between high and low APRs offered to users through the LendingTree marketplace. This report uses that index to analyze the rate difference and dollar savings for the 50 largest metropolitan areas in the United States. Analysts review the same rate difference and savings on a national basis in the weekly Mortgage Rate Competition Index.

“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,” said Tendayi Kapfidze, Chief Economist at LendingTree. “In Cincinnati, it could cost you nearly $24,000. LendingTree, the nation’s leading online loan marketplace, allows consumers to shop around and compare mortgage offers, potentially saving them thousands of dollars.”

Key findings:

  • Homebuyers in Cincinnati and Houston had the biggest potential rate savings by comparing competing offers. Rates in Cincinnati had a range of 64 basis points, followed by Houston at 61, then San Antonio, Dallas, Phoenix and Chicago at 58.
  • Comparing mortgage offers before buying saved the most money in California. Large loan sizes fuel lifetime savings of $99,544 in San Francisco, $75,330 in San Diego and $72,557 in Los Angeles.
  • Significant savings for purchase borrowers in every city. The index ranges from 42 basis points in New Orleans to 64 in Cincinnati.
  • Monthly savings up to $279. For borrowers in San Francisco, a spread of 51 points translates into $279 a month, given the median home price of $900,000.
  • Even less expensive cities register meaningful savings. In Detroit, a low median home price of $150,000 and narrow spread of 45 points still adds up to $14,729 in lifetime interest savings.
  • Individual borrower results will vary. LendingTree’s method uses median values, so half of borrowers would see smaller savings. But, just as important, half could see larger savings. There is no way for a borrower to know where they fall in this spectrum without shopping around, so it is imperative to compare offers.

Where purchase borrowers face the largest differences in mortgage rates

Cincinnati
Purchase Mortgage Rate Competition Index:
0.64
With a median home price of $169,100, borrowers here could save $67 in monthly payments, adding up to $798 a year. Lifetime interest savings would be $23,672.

Houston
Purchase Mortgage Rate Competition Index
: 0.61
With a median home price of $233,900, borrowers here could save $88 in monthly payments, adding up to $1,053 a year. Lifetime interest savings would be $31,217.

San Antonio
Purchase Mortgage Rate Competition Index:
0.58
With a median home price of $220,700, borrowers here could save $78 in monthly payments, adding up to $941 a year. Lifetime interest savings would be $27,918.

Where purchase borrowers could save the most in lifetime interest expense

San Francisco
Lifetime interest savings:
$99,544
An index of 0.51 and median home price of $900,000 adds up to savings of $280 in monthly payments, totaling $3,357 a year.

San Diego
Lifetime interest savings:
$75,330
An index of 0.57 and median home price of $607,000 adds up to savings of $212 in monthly payments, totaling $2,540 a year.

Los Angeles
Lifetime interest savings:
$72,558
An index of 0.56 and median home price of $595,100 adds up to savings of $204 in monthly payments, totaling $2,447 a year.

Where refinance borrowers face the largest differences in refinance mortgage rates

Bakersfield, Calif.
Refinance Mortgage Rate Competition Index:
0.81
With a median home price of $234,000, borrowers here could save $116 in monthly payments, adding up to $1,389 a year. Lifetime interest savings would be $41,163.

Oklahoma City
Refinance Mortgage Rate Competition Index:
0.72
With a median home price of $158,800, borrowers here could save $70 in monthly payments, adding up to $839 a year. Lifetime interest savings would be $24,893.

Detroit
Refinance Mortgage Rate Competition Index:
0.72
With a median home price of $150,000, borrowers here could save $66 in monthly payments, adding up to $788 a year. Lifetime interest savings would be $23,383.

To view the full report, visit https://www.lendingtree.com/home/cities-where-borrowers-save-the-most-by-shopping-around-for-mortgage-loans/

Cities with the largest differences in purchase mortgage rates

Rank

City

Mortgage

Rate

Competition

Index

Monthly

Payment

Savings

Annual

Payment

Savings

Lifetime

Interest

Savings

Median

Home

Price

1

Cincinnati

0.64

$67

$798

$23,673

$169,100

2

Houston

0.61

$88

$1,053

$31,217

$233,900

3

San Antonio

0.58

$78

$941

$27,918

$220,700

4

Dallas

0.58

$88

$1,058

$31,389

$249,000

5

Phoenix

0.58

$88

$1,055

$31,295

$248,900

6

Chicago

0.58

$90

$1,079

$31,999

$255,600

7

Philadelphia

0.57

$84

$1,007

$29,856

$238,900

8

Pittsburgh

0.57

$74

$892

$26,448

$212,000

9

Boston

0.57

$162

$1,944

$57,646

$464,100

10

San Diego

0.57

$212

$2,540

$75,330

$607,000

11

New York

0.57

$137

$1,646

$48,824

$395,500

12

Jacksonville, Fla.

0.56

$62

$746

$22,118

$180,600

13

Los Angeles

0.56

$204

$2,447

$72,558

$595,100

14

Denver

0.56

$143

$1,716

$50,886

$418,100

15

Austin, Texas

0.56

$101

$1,214

$36,010

$296,400

16

Columbus, Ohio

0.56

$60

$722

$21,420

$176,500

17

St. Louis

0.56

$60

$722

$21,405

$176,500

18

Seattle

0.56

$162

$1,950

$57,820

$478,500

19

Fresno, Calif.

0.56

$81

$978

$29,001

$240,000

20

Minneapolis

0.55

$87

$1,043

$30,927

$257,800

21

Cleveland

0.55

$49

$590

$17,483

$146,000

22

Charlotte, N.C.

0.55

$90

$1,077

$31,927

$267,100

23

Richmond, Va.

0.54

$86

$1,034

$30,665

$258,900

24

Bakersfield, Calif.

0.54

$78

$934

$27,690

$234,000

25

Salt Lake City

0.54

$97

$1,159

$34,385

$293,000

26

Portland, Ore.

0.54

$91

$1,094

$32,437

$276,400

27

Kansas City, Mo.

0.54

$65

$783

$23,213

$197,800

28

Indianapolis

0.54

$57

$682

$20,233

$173,700

29

Birmingham, Ala.

0.53

$65

$775

$22,972

$198,700

30

Tampa, Fla.

0.53

$73

$871

$25,817

$225,000

31

Atlanta

0.53

$66

$790

$23,433

$204,300

32

Memphis, Tenn.

0.53

$56

$666

$19,759

$172,700

33

Miami

0.52

$109

$1,304

$38,679

$340,000

34

Charleston, S.C.

0.52

$85

$1,024

$30,357

$267,100

35

Washington

0.52

$130

$1,562

$46,338

$408,500

36

Oklahoma City

0.51

$50

$597

$17,702

$158,800

37

Greenville, S.C.

0.51

$53

$639

$18,943

$170,600

38

San Francisco

0.51

$280

$3,357

$99,544

$900,000

39

Milwaukee

0.5

$76

$914

$27,093

$246,900

40

Orlando, Fla.

0.5

$76

$911

$27,014

$247,900

41

Albuquerque, N.M.

0.5

$62

$740

$21,947

$201,600

42

Raleigh, N.C.

0.49

$80

$961

$28,495

$267,500

43

Sacramento, Calif.

0.48

$103

$1,239

$36,731

$350,000

44

Hartford, Conn.

0.47

$69

$824

$24,427

$238,700

45

Grand Rapids, Mich.

0.46

$51

$615

$18,229

$182,400

46

Las Vegas

0.45

$72

$868

$25,745

$261,600

47

Nashville, Tenn.

0.45

$65

$777

$23,058

$234,300

48

Detroit

0.45

$41

$497

$14,729

$150,000

49

Tulsa, Okla.

0.45

$45

$539

$15,977

$163,800

50

New Orleans

0.42

$53

$636

$18,863

$204,300

 

 

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