LendingTree Reveals the Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans

New LendingTree study analyzes the savings available by comparing mortgage rates across the country

CHARLOTTE, N.C., May 8, 2018 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, today released its Mortgage Rate Competition Indexes for the 50 largest cities in the U.S. to assess how different markets behave across the country. Each week, LendingTree releases the Mortgage Rate Competition Index, a gauge that shows consumers how much they stand to save by comparing rates when they apply for a mortgage. The index is calculated on a national level to give an indication of the general dispersion of mortgage rates throughout the United States.

The national index is calculated weekly, and the city indexes are calculated on a quarterly basis. Below are the key findings of the Mortgage Rate Competition Indexes by city.
  • Tampa, Kansas City, Portland and New York are the cities where homebuyers saw the biggest rate savings by comparing competing offers. Rates in Tampa had a range of 0.62 followed by Kansas City, Portland and New York at 0.61.
  • California is where comparing mortgage offers before buying saved the most money. By comparing offers and securing a lower rate, you're automatically saving money over the term of your mortgage. Larger loan sizes fuel savings of $65,030 in San Francisco, $42,659 in Los Angeles and $42,315 in San Diego.
  • Significant savings for purchase borrowers in every city. The index ranges from 0.49 in Tulsa to 0.62 in Tampa.
  • Monthly savings up to $254. For borrowers in San Francisco, a spread of 0.58 translates into a potential savings of $254 per month given the median home price of $900,000 — the highest monthly savings we found.
  • Even less expensive cities register meaningful savings. In Detroit, a low median home price of $150,000 and narrow spread of 0.54 still add up to $9,952 in lifetime interest savings. Only Tulsa joins Detroit in having savings below $10,000.
  • The proof is in the pudding. LendingTree's method uses median values, so half of borrowers would see smaller savings, but just as importantly, 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 lenders and assess their offers.
  • Competition is influenced by the density of bank branches. Cities with fewer banks per capita had wider refinance indexes.


The metros where PURCHASE borrowers face the LARGEST differences in purchase mortgage rates.


Tampa, Fla.
Purchase Mortgage Rate Competition Index: 0.62 
With a median home price of $225,000 borrowers here could save $67 in monthly payments adding up to $809 a year. Lifetime interest savings would be $17,291.
Kansas City, Mo.
Purchase Mortgage Rate Competition Index: 0.61 
With a median home price of $197,800 borrowers here could save $59 in monthly payments adding up to $705 a year. Lifetime interest savings would be $15,061.
Portland, Ore.
Purchase Mortgage Rate Competition Index: 0.61 
With a median home price of $276,400 borrowers here could save $82 in monthly payments adding up to $983 a year. Lifetime interest savings would be $21,011.

The metros where PURCHASE borrowers could save the MOST in lifetime interest expense.



San Francisco
Lifetime Interest Expense Savings: $65,030 
An index of 0.58 and median home price of $900,000 adds up to savings of $254 in monthly payments, totaling $3,046 a year. The calculation assumes an 80% LTV.
Los Angeles
Lifetime Interest Expense Savings: $42,659 
An index of 0.58 and median home price of $595,100 adds up to savings of $167 in monthly payments, totaling $1,998 a year.
San Diego
Lifetime Interest Expense Savings: $42,315 
An index of 0.56 and median home price of $607,000 adds up to savings of $165 in monthly payments, totaling $1,983 a year.
 
What drives the difference in the competition index across cities?
Different lenders operate in different parts of the country, and even national lenders have different strategies in different areas. To try and assess the number of lenders in each metro, LendingTree looked at the density of bank branches. That is, the number of bank branches divided by the population. Even though the mortgage market is now almost evenly divided between non-banks and banks, and many loan originations are now online, the distribution of bank branches is still indicative of how competitive financial services are.

The findings revealed that in the refinance market, cities with fewer bank branches had wider spreads in rates. This relationship did not hold for purchase mortgages. Refinance transactions tend to be more price-sensitive, as the loan is the primary product. In a purchase transaction, the loan, though essential, is a secondary product to the home and thus less price (interest rate)-sensitive.

May 8, 2018 National Mortgage Rate Competition Index: Mortgage Borrowers Could Save Almost 10 Percent of the Loan Amount in Interest by Shopping Around
Purchase loans
  • Across all purchase loan applications on LendingTree for the week ending May 6, 2018, the index was 0.63, down 0.02 from the previous week.
  • How big of a deal is it to get a mortgage rate that's 0.63% lower than the competition? Over 30 years, that could translate to $29,273 in savings on a $300,000 loan —nearly 10% of the total loan amount.
Refinances
  • The index was wider than the purchase market in the refinance market at 0.67, down 0.01 from the prior week.
  • Using the same assumptions in the previous example, borrowers shopping for refi loans could have saved $31,098 by shopping for the lowest rate.
Other findings
  • Average savings in 2018 are outpacing 2017 savings, up to $28,000 from $21,000 for purchase mortgages. Refinance loan savings are up to $30,000 from $26,000.
  • The Mortgage Rate Competition has widened as rates increased, reflecting how mortgage lenders have unique business circumstances that impact how they change the rates at which they can offer consumers loans.

To view the full Weekly Mortgage Competition Index, visit https://www.lendingtree.com/home/mortgage/rates/mortgage-rate-competition-index-may-8/.

What is the Mortgage Rate Competition Index?
The LendingTree Mortgage Rate Competition Index is a new proprietary measure of the dispersion in mortgage pricing. It measures the spread in the APR of the best offers available on LendingTree relative to the least competitive (i.e. the highest) rates. 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 is the index formulated?
A mortgage shopper enters their information on LendingTree.com. They input loan variables including the proposed amount and down payment, property variables including property type and location and personal information including income. LendingTree transmits this data, including a soft credit inquiry, to lenders who evaluate the borrower against their lending parameters in their pricing engines. 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:
 
Offers APR
Lender 1 4.21
Lender 2 4.33
Lender 3 4.4
Lender 4 4.55
Lender 5 4.62
 
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 then 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.

To view the full Mortgage Rate Competition Indexes for the 50 largest cities in the U.S., visit https://www.lendingtree.com/home/mortgage/cities-where-borrowers-save/

 
Purchase Ranked by Mortgage Rate Competition Index
Rank City Mortgage 
Rate 
Competition 
Index
Monthly 
Payment 
Savings
Annual 
Payment 
Savings
Lifetime 
Interest 
Savings
Median 
Home 
Price
1 Tampa, Fla. 0.62 $67 $809 $17,291 $225,000
2 Kansas City, Mo. 0.61 $59 $705 $15,061 $197,800
3 Portland, Ore. 0.61 $82 $983 $21,011 $276,400
4 New York 0.61 $117 $1,403 $29,964 $395,500
5 Orlando, Fla. 0.60 $72 $869 $18,560 $247,900
6 Miami 0.60 $99 $1,190 $25,412 $340,000
7 Denver 0.60 $121 $1,456 $31,089 $418,100
8 Jacksonville, Fla. 0.60 $52 $626 $13,360 $180,600
9 Sacramento, Calif. 0.60 $101 $1,208 $25,802 $350,000
10 Phoenix 0.59 $71 $856 $18,286 $248,900
11 Cleveland 0.59 $42 $502 $10,726 $146,000
12 Memphis, Tenn. 0.59 $49 $589 $12,578 $172,700
13 Milwaukee 0.59 $70 $838 $17,903 $246,900
14 Richmond, Va. 0.58 $73 $877 $18,724 $258,900
15 San Francisco 0.58 $254 $3,046 $65,030 $900,000
16 Atlanta 0.58 $58 $691 $14,749 $204,300
17 St. Louis 0.58 $50 $596 $12,719 $176,500
18 San Antonio 0.58 $62 $744 $15,877 $220,700
19 Los Angeles 0.58 $167 $1,998 $42,659 $595,100
20 Philadelphia 0.57 $66 $796 $16,988 $238,900
21 Seattle 0.57 $132 $1,590 $33,935 $478,500
22 Boston 0.57 $128 $1,542 $32,914 $464,100
23 Austin, Texas 0.57 $82 $985 $21,021 $296,400
24 Dallas 0.57 $69 $823 $17,564 $249,000
25 Bakersfield, Calif. 0.57 $64 $772 $16,476 $234,000
26 Washington 0.57 $112 $1,343 $28,659 $408,500
27 Chicago 0.57 $70 $840 $17,932 $255,600
28 Pittsburgh 0.57 $58 $697 $14,873 $212,000
29 Birmingham, Ala. 0.57 $54 $653 $13,940 $198,700
30 Minneapolis 0.56 $70 $843 $17,988 $257,800
31 Houston 0.56 $64 $765 $16,320 $233,900
32 San Diego 0.56 $165 $1,983 $42,315 $607,000
33 Nashville, Tenn. 0.56 $64 $765 $16,333 $234,300
34 Indianapolis 0.56 $47 $567 $12,109 $173,700
35 Fresno, Calif. 0.56 $65 $780 $16,655 $240,000
36 Grand Rapids, Mich. 0.56 $49 $587 $12,518 $182,400
37 Hartford, Conn. 0.55 $64 $764 $16,292 $238,700
38 Charlotte, N.C. 0.55 $71 $852 $18,179 $267,100
39 Raleigh, N.C. 0.55 $71 $852 $18,172 $267,500
40 Salt Lake City 0.55 $77 $925 $19,737 $293,000
41 Cincinnati 0.54 $44 $531 $11,327 $169,100
42 Albuquerque, N.M. 0.54 $53 $632 $13,478 $201,600
43 Oklahoma City 0.54 $41 $497 $10,601 $158,800
44 Las Vegas 0.54 $68 $815 $17,390 $261,600
45 Detroit 0.54 $39 $467 $9,952 $150,000
46 Greenville, S.C. 0.53 $44 $528 $11,262 $170,600
47 Columbus, Ohio 0.52 $45 $534 $11,397 $176,500
48 Charleston, S.C. 0.52 $67 $802 $17,102 $267,100
49 New Orleans 0.52 $51 $610 $13,012 $204,300
50 Tulsa, Okla. 0.49 $39 $468 $9,977 $163,800
 

 
Purchase Ranked by Lifetime Interest Expense (Assumes 80% LTV)
Rank City Mortgage 
Rate 
Competition 
Index
Monthly 
Payment 
Savings
Annual 
Payment 
Savings
Lifetime 
Interest 
Savings
Median 
Home 
Price
1 San Francisco 0.58 $254 $3,046 $65,030 $900,000
2 Los Angeles 0.58 $167 $1,998 $42,659 $595,100
3 San Diego 0.56 $165 $1,983 $42,315 $607,000
4 Seattle 0.57 $132 $1,590 $33,935 $478,500
5 Boston 0.57 $128 $1,542 $32,914 $464,100
6 Denver 0.60 $121 $1,456 $31,089 $418,100
7 New York 0.61 $117 $1,403 $29,964 $395,500
8 Washington 0.57 $112 $1,343 $28,659 $408,500
9 Sacramento, Calif. 0.60 $101 $1,208 $25,802 $350,000
10 Miami 0.60 $99 $1,190 $25,412 $340,000
11 Austin, Texas 0.57 $82 $985 $21,021 $296,400
12 Portland, Ore. 0.61 $82 $983 $21,011 $276,400
13 Salt Lake City 0.55 $77 $925 $19,737 $293,000
14 Richmond, Va. 0.58 $73 $877 $18,724 $258,900
15 Orlando, Fla. 0.60 $72 $869 $18,560 $247,900
16 Phoenix 0.59 $71 $856 $18,286 $248,900
17 Charlotte, N.C. 0.55 $71 $852 $18,179 $267,100
18 Raleigh, N.C. 0.55 $71 $852 $18,172 $267,500
19 Minneapolis 0.56 $70 $843 $17,988 $257,800
20 Chicago 0.57 $70 $840 $17,932 $255,600
21 Milwaukee 0.59 $70 $838 $17,903 $246,900
22 Dallas 0.57 $69 $823 $17,564 $249,000
23 Las Vegas 0.54 $68 $815 $17,390 $261,600
24 Tampa, Fla. 0.62 $67 $809 $17,291 $225,000
25 Charleston, S.C. 0.52 $67 $802 $17,102 $267,100
26 Philadelphia 0.57 $66 $796 $16,988 $238,900
27 Fresno, Calif. 0.56 $65 $780 $16,655 $240,000
28 Bakersfield, Calif. 0.57 $64 $772 $16,476 $234,000
29 Nashville, Tenn. 0.56 $64 $765 $16,333 $234,300
30 Houston 0.56 $64 $765 $16,320 $233,900
31 Hartford, Conn. 0.55 $64 $764 $16,292 $238,700
32 San Antonio 0.58 $62 $744 $15,877 $220,700
33 Kansas City, Mo. 0.61 $59 $705 $15,061 $197,800
34 Pittsburgh 0.57 $58 $697 $14,873 $212,000
35 Atlanta 0.58 $58 $691 $14,749 $204,300
36 Birmingham, Ala. 0.57 $54 $653 $13,940 $198,700
37 Albuquerque, N.M. 0.54 $53 $632 $13,478 $201,600
38 Jacksonville, Fla. 0.60 $52 $626 $13,360 $180,600
39 New Orleans 0.52 $51 $610 $13,012 $204,300
40 St. Louis 0.58 $50 $596 $12,719 $176,500
41 Memphis, Tenn. 0.59 $49 $589 $12,578 $172,700
42 Grand Rapids, Mich. 0.56 $49 $587 $12,518 $182,400
43 Indianapolis 0.56 $47 $567 $12,109 $173,700
44 Columbus, Ohio 0.52 $45 $534 $11,397 $176,500
45 Cincinnati 0.54 $44 $531 $11,327 $169,100
46 Greenville, S.C. 0.53 $44 $528 $11,262 $170,600
47 Cleveland 0.59 $42 $502 $10,726 $146,000
48 Oklahoma City 0.54 $41 $497 $10,601 $158,800
49 Tulsa, Okla. 0.49 $39 $468 $9,977 $163,800
50 Detroit 0.54 $39 $467 $9,952 $150,000
 

 
Refinance Ranked by Mortgage Rate Competition Index 
 
Rank City Mortgage 
Rate 
Competition 
Index
Monthly 
Payment 
Savings
Annual 
Payment 
Savings
Lifetime 
Interest 
Savings
Median 
Home 
Price
1 New Orleans 0.72 $71 $856 $18,335 $204,300
2 Salt Lake City 0.72 $102 $1,226 $26,258 $293,000
3 Indianapolis 0.69 $58 $693 $14,818 $173,700
4 Seattle 0.69 $159 $1,906 $40,788 $478,500
5 Raleigh, N.C. 0.68 $88 $1,061 $22,699 $267,500
6 Fresno, Calif. 0.68 $75 $901 $19,278 $228,400
7 Dallas 0.68 $82 $980 $20,969 $249,000
8 Houston 0.68 $77 $921 $19,697 $233,900
9 Phoenix 0.68 $82 $978 $20,929 $248,900
10 Denver 0.68 $137 $1,641 $35,102 $418,100
11 Bakersfield, Calif. 0.67 $76 $916 $19,601 $234,000
12 Charlotte, N.C. 0.67 $87 $1,045 $22,356 $267,100
13 Austin, Texas 0.67 $97 $1,158 $24,770 $296,400
14 Louisville, Ky. 0.67 $57 $681 $14,571 $175,700
15 Boston 0.67 $149 $1,794 $38,368 $464,100
16 San Antonio 0.67 $71 $853 $18,246 $220,700
17 Tampa, Fla. 0.66 $72 $868 $18,572 $225,000
18 Atlanta 0.66 $66 $787 $16,838 $204,300
19 Portland, Ore. 0.66 $89 $1,064 $22,744 $276,400
20 Jacksonville, Fla. 0.66 $58 $695 $14,861 $180,600
21 Grand Rapids, Mich. 0.66 $75 $898 $19,195 $234,000
22 Miami 0.66 $109 $1,302 $27,847 $340,000
23 Orlando, Fla. 0.66 $79 $949 $20,288 $247,900
24 Minneapolis 0.66 $82 $984 $21,048 $257,800
25 Sacramento, Calif. 0.65 $110 $1,326 $28,352 $350,000
26 Cincinnati 0.65 $53 $641 $13,698 $169,100
27 Hartford, Conn. 0.65 $75 $904 $19,321 $238,700
28 Los Angeles 0.65 $187 $2,244 $47,978 $595,100
29 Philadelphia 0.65 $75 $901 $19,260 $238,900
30 San Diego 0.65 $190 $2,278 $48,704 $607,000
31 Detroit 0.64 $47 $561 $11,997 $150,000
32 San Francisco 0.64 $279 $3,346 $71,522 $900,000
33 Richmond, Va. 0.64 $80 $956 $20,442 $258,900
34 New York 0.63 $120 $1,446 $30,899 $395,500
35 Washington 0.63 $124 $1,490 $31,836 $408,500
36 Nashville, Tenn. 0.63 $71 $854 $18,260 $234,300
37 Columbus, Ohio 0.63 $54 $644 $13,755 $176,500
38 Milwaukee 0.63 $75 $899 $19,210 $246,900
39 Chicago 0.63 $77 $928 $19,822 $255,600
40 Pittsburgh 0.63 $64 $769 $16,441 $212,000
41 Albuquerque, N.M. 0.63 $61 $732 $15,634 $201,600
42 St. Louis 0.63 $53 $641 $13,688 $176,500
43 Memphis, Tenn. 0.63 $52 $627 $13,393 $172,700
44 Greenville, S.C. 0.63 $52 $619 $13,230 $170,600
45 Oklahoma City 0.63 $48 $576 $12,315 $158,800
46 Cleveland 0.63 $44 $530 $11,322 $146,000
47 Tulsa, Okla. 0.61 $48 $578 $12,358 $163,800
48 Kansas City, Mo. 0.59 $56 $673 $14,380 $197,800
49 Birmingham, Ala. 0.56 $65 $784 $16,731 $240,000
50 Las Vegas 0.52 $66 $788 $16,793 $261,600
 

 
Refinance Ranked by Lifetime Interest Expense (Assumes 80% LTV)
Rank City Mortgage 
Rate 
Competition 
Index
Monthly 
Payment 
Savings
Annual 
Payment 
Savings
Lifetime 
Interest 
Savings
Median 
Home 
Price
1 San Francisco 0.64 $279 $3,346 $71,522 $900,000
2 San Diego 0.65 $190 $2,278 $48,704 $607,000
3 Los Angeles 0.65 $187 $2,244 $47,978 $595,100
4 Seattle 0.69 $159 $1,906 $40,788 $478,500
5 Boston 0.67 $149 $1,794 $38,368 $464,100
6 Denver 0.68 $137 $1,641 $35,102 $418,100
7 Washington 0.63 $124 $1,490 $31,836 $408,500
8 New York 0.63 $120 $1,446 $30,899 $395,500
9 Sacramento, Calif. 0.65 $110 $1,326 $28,352 $350,000
10 Miami 0.66 $109 $1,302 $27,847 $340,000
11 Salt Lake City 0.72 $102 $1,226 $26,258 $293,000
12 Austin, Texas 0.67 $97 $1,158 $24,770 $296,400
13 Portland, Ore. 0.66 $89 $1,064 $22,744 $276,400
14 Raleigh, N.C. 0.68 $88 $1,061 $22,699 $267,500
15 Charlotte, N.C. 0.67 $87 $1,045 $22,356 $267,100
16 Minneapolis 0.66 $82 $984 $21,048 $257,800
17 Dallas 0.68 $82 $980 $20,969 $249,000
18 Phoenix 0.68 $82 $978 $20,929 $248,900
19 Richmond, Va. 0.64 $80 $956 $20,442 $258,900
20 Orlando, Fla. 0.66 $79 $949 $20,288 $247,900
21 Chicago 0.63 $77 $928 $19,822 $255,600
22 Houston 0.68 $77 $921 $19,697 $233,900
23 Bakersfield, Calif. 0.67 $76 $916 $19,601 $234,000
24 Hartford, Conn. 0.65 $75 $904 $19,321 $238,700
25 Fresno, Calif. 0.68 $75 $901 $19,278 $228,400
26 Philadelphia 0.65 $75 $901 $19,260 $238,900
27 Milwaukee 0.63 $75 $899 $19,210 $246,900
28 Grand Rapids, Mich. 0.66 $75 $898 $19,195 $234,000
29 Tampa, Fla. 0.66 $72 $868 $18,572 $225,000
30 New Orleans 0.72 $71 $856 $18,335 $204,300
31 Nashville, Tenn. 0.63 $71 $854 $18,260 $234,300
32 San Antonio 0.67 $71 $853 $18,246 $220,700
33 Atlanta 0.66 $66 $787 $16,838 $204,300
34 Las Vegas 0.52 $66 $788 $16,793 $261,600
35 Birmingham, Ala. 0.56 $65 $784 $16,731 $240,000
36 Pittsburgh 0.63 $64 $769 $16,441 $212,000
37 Albuquerque, N.M. 0.63 $61 $732 $15,634 $201,600
38 Jacksonville, Fla. 0.66 $58 $695 $14,861 $180,600
39 Indianapolis 0.69 $58 $693 $14,818 $173,700
40 Louisville, Ky. 0.67 $57 $681 $14,571 $175,700
41 Kansas City, Mo. 0.59 $56 $673 $14,380 $197,800
42 Columbus, Ohio 0.63 $54 $644 $13,755 $176,500
43 Cincinnati 0.65 $53 $641 $13,698 $169,100
44 St. Louis 0.63 $53 $641 $13,688 $176,500
45 Memphis, Tenn. 0.63 $52 $627 $13,393 $172,700
46 Greenville, S.C. 0.63 $52 $619 $13,230 $170,600
47 Tulsa, Okla. 0.61 $48 $578 $12,358 $163,800
48 Oklahoma City 0.63 $48 $576 $12,315 $158,800
49 Detroit 0.64 $47 $561 $11,997 $150,000
50 Cleveland 0.63 $44 $530 $11,322 $146,000
 

About LendingTree
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