Mortgage rates are crazy low right now, at their best levels since the fall of 2016 and heading toward all-time lows as the coronavirus threat rattles investors.
So, if you're thinking about buying a home or doing a refinance, you can just assume that a lender will always give you one of today's rock-bottom rates. Right?
It shows that if you don't compare rates and shop around, you could easily wind up paying tens of thousands of dollars in extra interest, depending on where you live.
"In other words, it pays to do your research.
Mortgage rates can vary widely from lender to lender
The study found that in many parts of the country, it's common for mortgage rates to differ by around one full percentage point from one lender to the next.
This is what we mean: Bank XYZ might offer you a 30-year fixed-rate mortgage at 4.45%, but Bank ABC would give you a loan at just 3.5%.
In some markets — including Las Vegas, Milwaukee and Virginia Beach, Virginia — rates for homebuyers typically vary by more than a full point between lenders.
Those kinds of differences translate to real money. When you're purchasing a home, not taking the very first mortgage rate offered to you can save you an average $125 a month, or about $1,499 a year. If you're refinancing, you can save around $163 a month, or $1,953 a year.
Shopping around can save a homebuyer up to $66K
In many places, comparison shopping can mean serious savings, the study shows.
Homebuyers throughout the 50 largest cities in the U.S. will save an average $44,500 over the life of their mortgage if they shop around for the best rate, according to the research.
Average monthly savings: $163
Average annual savings: $1,954
Lifetime interest savings: $58,024
A homeowner who shops around could save $80K on a refi
Falling mortgage rates have had homeowners overwhelming lenders with refinance applications, which are at their highest level since June 2013 and have been pouring in at triple the rate of a year ago.