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Metros Where Mortgage Refinance Borrowers Saved the Most by Shopping Around in Q2 2021

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Since the start of the COVID-19 pandemic last year, mortgage rates have remained near record lows. While some lenders tightened their standards in the wake of the crisis, homeowners have had new opportunities to refinance their mortgages and potentially save significant amounts of money.

To help consumers understand how much they might save, LendingTree created the Mortgage Rate Competition Index. It measures the basis-point spread between high and low annual percentage rates, or APRs, offered to users on the LendingTree platform in the second quarter of 2021. APR measures your total cost of borrowing, including the interest rate, points, lender fees and mortgage insurance.

LendingTree found that refinancing in 50 of the nation’s largest metros could save homeowners an average of nearly $39,000 over the life of the loan. That could translate to more than $57,000 in San Francisco or nearly $29,000 in Oklahoma City.

Key findings

  • Comparing refinance offers could yield significant total savings for borrowers in some of the nation’s largest metros. Refinance borrowers could save the most in San Francisco ($57,089), Los Angeles ($53,569) and San Diego ($53,197).
  • Even in metros where savings aren’t as robust as in San Diego or San Francisco, significant savings are still possible. For example, in Oklahoma City, where potential total savings are the lowest, refinance borrowers could still pocket $28,766 over the life of the loan by shopping around.
  • Harrisburg, Pa., Denver and Fresno, Calif., are the metros where refinance borrowers see the largest spreads in offered APRs when they shop around. The average index in these areas is 0.89. This spread yields an average lifetime interest savings of $43,228.
  • Cutting back the total interest paid over a loan’s lifetime can translate into meaningful savings on a monthly and annual basis. For example, refinance borrowers across the country can save an average of $109 a month, or about $1,311 each year.

What the Mortgage Rate Competition Index means for you

Let’s say a borrower is offered two loans on the LendingTree platform — one with an APR of 4% and another with an APR of 3.5%. This represents a spread of 0.5%, or 50 basis points. The wider the Mortgage Rate Competition Index — more on the index soon — the more a potential buyer might save by shopping around with multiple lenders.

For this report, LendingTree used the index to analyze the difference in APRs and potential savings for mortgage refinance borrowers in 50 of the nation’s largest metros.

What is the Mortgage Rate Competition Index?

The LendingTree Mortgage Rate Competition Index is a proprietary measure of the distribution in mortgage pricing. It measures the APR spread of the best offers available on LendingTree relative to the least competitive (the highest) APRs on 30-year, fixed-rate mortgages. LendingTree research shows that mortgage rate competition varies with the financial and operational measures of activity in the mortgage market.

How is the index formulated?

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

Lender 14.21%
Lender 24.33%
Lender 34.40%
Lender 44.55%
Lender 54.62%

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 loans and find the median of the individual spread, which is our index value. This is done separately for the population of purchase and refinance loan requests.

For this study, LendingTree used data on the combined statistical area (CSA) or metropolitan statistical area (MSA) levels to approximate on a metro level.


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