Home LoansMortgageMortgage Rates

Over 60% of Purchase Borrowers Received Mortgage Rates Under 4.25% Last Week

Homebuyers could have seen median lifetime savings of $56,826 in interest on a $300,000 loan by comparison shopping for the best mortgage rates.

July 9, 2019 — Charlotte, N.C.

Each week, LendingTree reports how much consumers can save by comparing rates during the loan-shopping process. We describe these savings in two ways, to provide the most detailed data possible on mortgage rates. The LendingTree Mortgage Rate Distribution details the range of mortgage interest rates on offer. The Mortgage Rate Competition Index is the median spread between the lowest and highest APRs offered by lenders in our marketplace.

For the week ending July 7, 2019, the share of borrowers with rates under 4.25% was 60.1%.

Mortgage Rate Distribution

  • For 30-year, fixed-rate mortgages, approximately 60.1% of purchase borrowers received offers of 4.25% or less. That is up from 57% of borrowers the previous week. A year ago, 0.06% of offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, 4.125% was the most common interest rate. This rate was offered to 14.3% of borrowers.
  • Of 30-year, fixed-rate mortgage refinance borrowers, 72.8% received offers of 4.25% or less, which is up from 70.4% the previous week. A year ago, no refinance offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage refinance applications, the most common interest rate was 3.875%, offered to 18.9% of borrowers.

Mortgage Rate Competition Index

  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, the index was 1.19, down from 1.22 the previous week.
  • How big of a deal is it to get a mortgage APR that’s 1.19 percentage points lower than the competition? Over 30 years, that could translate to $56,826 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).
  • The index was wider in the refinance market at 1.35, up from 1.34 the previous week. Refinance borrowers could have saved $65,108 by shopping for the lowest rate.

Other findings

  • The distribution of rates — and, as a result, the Mortgage Rate Competition Index — has widened as rates increased, reflecting how mortgage lenders may change the rates at which they can offer consumers loans, depending on their unique business circumstances.

Rate Distribution – Purchase

Rates 4.25% and below – Purchase

Mortgage Savings Tracker

LendingTree Mortgage Savings Tracker

Mortgage Rate Competition Index

LendingTree Mortgage Rate Competition Index

Want to learn more about what economic factors influence mortgage rates?

Check out this article on LendingTree.

About the Mortgage Rate Competition Index

The LendingTree Mortgage Rate Competition Index is a proprietary measure of the dispersion in mortgage pricing. It measures the APR spread of the best offers available on LendingTree relative to the least competitive (i.e., the highest) rates on 30-year, fixed-rate mortgages. Our research shows that mortgage rate competition varies with the financial and operational measures of activity in the mortgage markets. More details on the index are available in a white paper on LendingTree’s website.

How the index is formulated

A mortgage shopper enters their information on LendingTree.com. They input loan variables, including the proposed amount and down payment, and property variables, including property type and location. Using our proprietary algorithm, LendingTree matches borrowers with lenders based on the criteria they provided. Interested lenders return a rate and fee offer. For our index, we combine the rate and fees into an APR and calculate the spread as follows:

The spread is the difference between the highest and lowest offers, in this example, 4.62-4.21=0.41. We repeat this calculation across 30-year, fixed-rate mortgage loans that week and then find the median of the individual spread, which is our index value for that week. This is done separately for the population of purchase and refinance loan requests.

 


Featured Articles

Best Cities in Louisiana for Homeownership

In Louisiana, it’s not just the summer weather that’s scorching; it’s also one of the hottest real estate markets in the country, with home values appreciating in every area, both …

Read More »

What is Mutual of Omaha Mortgage? Mutual of Omaha opened in 1909 and is headquartered in Omaha, Neb., but its consumer mortgage lending division operates out of San Diego. Mutual …

Read More »

A Teaser Rate: Is that low interest rate too good to be true?

So-called teaser rates were once regularly used to attract borrowers to take out adjustable-rate mortgages, but they don’t exist anymore as a common loan product, according to Tendayi Kapfidze, chief …

Read More »

What is SunTrust? Founded in 1890 and headquartered in Atlanta, SunTrust is one of the nation’s largest banks, offering a full range of products and services to individuals and businesses. …

Read More »

What is loanDepot? Headquartered in Southern California, loanDepot brands itself as a nonbank alternative to traditional lenders. The company was started in 2010 by Anthony Hsieh and has since grown …

Read More »

 

Compare Mortgage Loan Offers