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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