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More Than Half of Purchase Borrowers Received Mortgage Rates Below 4% Last Week

Homebuyers could have seen median lifetime savings of $47,172 in interest on a $300,000 loan by comparison shopping for the best mortgage rates.

Nov. 5, 2019 — Charlotte, N.C.

Each week, LendingTree reports on how much money consumers can save by comparing mortgage 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 annual percentage rates, or APRs, offered by lenders in our marketplace.

For the week ending Nov. 3, 2019, the share of borrowers with rates below 4% was 53.5%.

Mortgage Rate Distribution

  • For 30-year, fixed-rate mortgages, 53.5% of purchase borrowers received offers below 4%. This is up from 50.3% of borrowers the previous week. A year ago, virtually no offers were below 4%. 
  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, 3.875% was the most common interest rate offered to 13.9% of borrowers.
  • Of 30-year, fixed-rate mortgage refinance borrowers, 54.7% received offers below 4%, up from 47.4% the previous week. A year ago, virtually no refinance offers were below 4%.
  • Across all 30-year, fixed-rate mortgage refinance applications, the most common interest rate was 3.75%, offered to about 16.6% of borrowers.

Mortgage Rate Competition Index

  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, the index was 1.0, up from 0.99 the previous week.
  • How much can you potentially save with an APR that’s 1 percentage point lower than the competition? Over 30 years, that could translate to $47,172 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).
  • The index was wider in the refinance market at 1.19, up 3 basis points from the previous week. Refinance borrowers could have saved $56,776 by shopping for the lowest rate.

Rate Distribution — Purchase

Rates 4% and below — Purchase

Mortgage Savings Tracker

Mortgage Rate Competition Index

Learn more about what economic factors influence mortgage rates.

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 LendingTree white paper.

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 provide. Interested lenders return a rate and fee offer. For our index, we combine the interest rate and loan fees into the 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 purchase and refinance loan requests.

 

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