Skip to content
SuperMoney logo
SuperMoney logo
magnifying glass and book icon

Industry Study

2024 Mortgage Industry Study

Last updated 03/15/2024 by

Andrew Latham

Edited by

This comprehensive mortgage industry study investigates multiple data sources to reveal important mortgage industry trends and statistics.
The mortgage industry plays an integral role in the U.S. economy. In 2022, 22% of U.S. homebuyers completed their purchases without a mortgage, according to Zillow. All other buyers, nearly eight in 10, needed a mortgage. Mortgages are the only reason many of us can afford to own a home. They also fuel much of the residential construction sector, since nine out of 10 new homes are financed with mortgages.
Percentage of new homes purchased with a mortgage in 2022
Our study uncovers surprising facts about the growth of total mortgage debt and its relationship to home equity and rental property vacancies. We reveal the main factors that determine the cost of a mortgage and how these have changed over time. We also look into the new wave of technological innovation that is reshaping the mortgage landscape. But first, let’s start with a brief look at the state of the mortgage industry and its history.
Fun fact: Zillow’s 2022 percentage for no-mortgage homebuyers is 10% below its 2021 percentage of 32%. This drop is despite October 2022 having shown, per Redfin’s analysis, more all-cash home purchases (32%) than any month over the preceding eight years. So, even when cash buyers have been at their highest, roughly seven in 10 buyers have still needed mortgage loans.

Compare Home Loans

Compare rates from multiple vetted lenders. Discover your lowest eligible rate.
Compare Rates

The size of America’s housing and mortgage market

To get a sense of the size of the American housing and mortgage market, this section examines average mortgage balances, prevalence of mortgages among U.S. homeowners, Americans’ total mortgage debt, top U.S. mortgage lenders’ origination counts, and key U.S. Housing Market statistics.

What is the average mortgage balance?

In December 2022, the national average mortgage loan balance was $219,517. Although the percentage of American consumers with a mortgage (45% in 2022) has hardly changed, the average mortgage balance has increased by nearly 19.7% since 2007 ($183,469). (Source, source.)

58% of owner-occupied U.S. homes still have a mortgage

Mortgages are not just for first-time homeowners. The majority of homes that Americans own and live in have mortgages.
According to the U.S. Census Bureau’s most recent American Housing Survey (2021), of 82,513 owner-occupied properties, 34,540 (about 42%) are owned free and clear. That means that 58% of these homes have mortgages. Most of these mortgages are home-purchase mortgages or lump-sum home-equity loans (aka “regular” mortgages).

How much mortgage debt do Americans owe?

After a brief dip between 2008 and 2015, mortgage debt is again on the rise. At the end of September 2022, American households owed an all-time high total of $11.67 trillion in mortgage debt (source). If you include mortgage debt from all sources, including for-profit businesses and financial institutions, the total mortgage debt is $19.06 trillion (source).

Top mortgage lenders by volume

The list of top mortgage lenders has historically been dominated by large banks. However, non-bank lenders have mixed things up in the last several years. According to the latest data collected under the Home Mortgage Disclosure Act (HMDA), Rocket Mortgage was the largest mortgage originator in 2021. In fact, three out of the top five mortgage originators are non-bank financing companies. If you look at the top 10 mortgage lenders, there are more non-bank lenders than bank lenders.

1.) Rocket Mortgage — 1,236,000 originations

2.) United Wholesale Mortgage (UWM)* — 654,000 originations

* Although the Consumer Financial Protection Bureau (CFPB) report issued in September 2022 identifies the company as United Shore Financial Services, the company announced in 2020 that it was unifying under the name of its subsidiary, United Wholesale Mortgage (source).

3.) — 390,000 originations

4.) Wells Fargo — 376,000 originations

5.) Freedom Mortgage Corporation — 361,000 originations

6.) JPMorgan Chase — 274,000 originations

7.) Fairway Independent Mortgage Corporation — 236,000 originations

8.) Caliber Home Loans — 232,000 originations

9.) Home Point Financial Corporation — 209,000 originations

Another non-bank financial institution, Home Point Financial does business as Homepoint.

10.) Pennymac Loan Services — 209,000 originations

Even when you measure overall volume, non-bank lenders are closing the gap. Here is a graphical overview of the stats for the top 10 mortgage originators:

How much equity do American households have in real estate?

It’s not all bad news. American households’ equity in real estate is higher than ever. And that includes the peak of the real estate bubble of 2006. In the third quarter of 2022, U.S. households owned $29.555 trillion in equity.

What is the size of the U.S. Housing Market?

If you combine mortgage debt and housing equity you get a total value of $48.6 trillion, which is nearly $21 trillion more than its previous peak in 2006.

Mortgage industry delinquency rate has fallen below 2%

Historically, mortgage delinquency rates have been low when compared to credit cards and personal loans. That all changed during the 2007–8 financial crisis, when mortgage delinquencies rose sharply. Since then, delinquency rates have trended downward in most years. As of July 2022, differences between delinquency rates for mortgages (1.86%), consumer loans (1.92%), and credit cards (2.08%) were small.

Mortgage down payments and origination fees

Most borrowers need a down payment. Members of the military, veterans, and borrowers who are eligible for a loan guaranteed by the U.S. Department of Veterans Affairs (VA) are the only exceptions. The VA still backs zero-down loans.
That doesn’t mean you need a 20% down payment to afford a home. The national median loan-to-value (LTV) ratio at origination is 95% (source), which means the median down payment is around 5%.

How much do you need as a down payment?

The minimum down payment for most people is 3% or 3.5% of the home’s purchase price. In the third quarter (Q3) of 2022, the median price of a new home was $454,900. So the minimum down payment was between $13,647 and $15,922. A typical first-time buyer may put down 7%, a typical repeat buyer 17% (source). On a median-priced home in Q3 2022, that would mean $31,843 or $77,333. However, LTV ratios vary considerably by location. The map below shows the average loan-to-value ratio in each state.

How much should borrowers expect to pay in origination fees and mortgage points?

Origination fees and mortgage points vary by lender and mortgage type. They also depend on the creditworthiness of the borrower. As you can see in the graph below, origination fees and discount rates in the last 25 years have ranged between 2% and 0.2% of the mortgage amount.
Origination fees include a variety of costs, such as underwriting fees, commitment fees, and document preparation fees.
There are two types of mortgage points: discount points and origination points. Discount points are a form of prepaid interest. The more you pay in discount points, the lower your interest rate will be. Typically, every discount point you pay on a mortgage will drop the rate by 1/8 to 1/4 of a percent. Origination points are just another type of origination fee designed to cover the costs of processing a mortgage.
You can also pay fewer fees upfront if you’re willing to accept a higher rate on your loan.

What credit score do you need to qualify for a mortgage?

Minimum credit score requirements vary wildly by lender and mortgage type. According to a report by the New York Fed and Equifax (source), the median credit score for a mortgage origination is 768. However, you can have a much lower score and still qualify.
For example, the average credit score for borrowers with an FHA mortgage in 2022 was 664. However, 11.22% had a score below 620 and the minimum credit score is 500 (source).

Mortgage interest rates

Interest rates are a key factor in the mortgage market. That’s because they’re one component of the homeowner’s monthly mortgage payment. The other component is a portion of the principal balance of the loan.
In the early 1980s, mortgage rates were as high as 18%. From that shocking level, rates trended more or less steadily downward until they bottomed out at historic lows in the 3% range in 2012.
Rates began to rise again the next year as the U.S. economy recovered from the Great Recession.
For several years, mortgage interest rates fluctuated in the 3% to 4% range. However, when efforts to mitigate COVID-19 hit the U.S economy in 2020, the mortgage rates went down to an all-time low of 2.66% in December 2020. Rates then fluctuated around 3% through 2021. In 2022, the Federal Reserve began working to stem inflation, and that year saw mortgage rates rise above 6%. (Source.)

A brief history of mortgages

Home mortgages in the United States have a complicated and, at times, colorful history.
One way to understand how the mortgage market has evolved is to track the federal government’s involvement in the mortgage sector. Before the Great Depression in the 1930s, most mortgages were arranged privately rather than through banks. The federal government wasn’t involved in mortgage lending, and fewer than half the households in the country owned a home. A 50% down payment was typically needed to buy. And most mortgages had to be paid back sooner than the 15 or 30 years that are usually allowed today. Some mortgages had a term of just five years. Not surprisingly, most people couldn’t afford to buy a home with these difficult requirements.

Mortgages and the Great Depression

During the Great Depression, about half of U.S. mortgages were delinquent. That means half the people who’d managed to get a mortgage before the Great Depression weren’t able to make the payments to keep their home. A lot of banks failed. The federal government set up new agencies to supervise banks and other mortgage lenders.

Greatest Generation to Baby Boomers

By the end of World War II in 1945, banks were the prime source for home mortgages. Most buyers obtained a long-term, fixed-rate mortgage. Two government agencies — the VA and Federal Housing Administration (FHA) — introduced loan guarantees that enabled more people to buy a home. By 1970, 64% of households owned a home.
In 1968, the federal government created a quasi-governmental mortgage finance agency, now known as Fannie Mae. A second agency, now known as Freddie Mac, was established in 1970.
Fannie and Freddie don’t directly originate mortgages. Instead, they purchase mortgages from lenders and either keep them in their portfolio or resell them to investors in the form of mortgage-backed securities. By the year 2000, Fannie and Freddie were behind 50% of home mortgages, with the FHA and VA also still involved in the mortgage market (source). Their roughly 50% share of single-family home mortgages has persisted (source).

Xennials to Millennials

In the 2000s, lenders introduced new mortgage products to enable more people to buy a home. Many of these new homeowners had poor credit and made very small down payments. The new mortgages often allowed borrowers to pay only the interest on the loan. Some of the mortgages allowed a “minimum” payment, with the unpaid interest added to the loan balance.
These high-risk mortgages raised the homeownership rate. But they also caused severe disruptions in the mortgage and housing markets when buyers couldn’t afford their mortgage payments and home prices dropped.
In 2008, the problems were so severe that the federal government decided to step in and fully take over Fannie and Freddie, which had suffered huge financial losses (source). And, according to Donald H. Layton of the Furman Center for Real Estate and Urban Policy, “there is arguably no end in sight” to direct federal control of these enterprises (source).
In 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, which included new federal laws that were intended to encourage lenders to make less risky mortgages. Since then, most home buyers (about 90%) have chosen a traditional 30-year, fixed-rate mortgage (source, source).

The rise of fintech in the mortgage market

Since the financial crisis of 2008, financial technology (fintech) has become an important driving force for both startups and established financial and technology companies trying to replace or enhance the usage of financial services provided by existing financial companies.

What is a fintech lender?

It’s a pretty vague term that has become somewhat of a marketing buzzword. We are defining it as any lender that has a mortgage application process that can be performed entirely online. According to a New York Federal Reserve report, fintech mortgage lenders’ share of the mortgage market increased from 2% ($34 billion) in 2010 to 8% ($161 billion) in 2016 (source).
Fintech lenders process mortgage applications faster (10 days as opposed to 50 days) and have lower default rates — 25% lower (source). They also tend to be more agile and flexible when it comes to adapting to changing financial circumstances.

Mortgage rates and affordability

A 1% increase in the interest rate of a 30-year mortgage can determine the affordability of a home purchase. The table below shows the effect on the monthly payments and total cost of a $300,000 mortgage.
The total cost difference of $192,183 may be what catches your eye when looking at a 3% and a 6% mortgage. However, it is the monthly payment difference of $534 that is more likely to determine whether a household can afford to buy a home.
The graph below shows the correlation between mortgage rates (i.e., monthly payments) and new home sales from 1971 to 2022.
Mortgage rate changes can price many households out of the mortgage market. This effect is particularly strong in regions where the home prices are high in comparison to median family incomes.

Mortgage industry statistics: the housing affordability index

A useful index to determine housing affordability is the traditional housing affordability index (HAI). It shows what percentage of a population can afford to buy the median-priced home in a given region. As you can see from the map below, the majority of the United States counties provide reasonably affordable housing. It also shows hot spots where housing is less affordable in the United States. In some densely populated areas, residential properties are too expensive for the average household to purchase a home.
Source: ARCGIS – Esri’s Housing Affordability Index
Large swaths of the West Coast are unaffordable. In this map, California is a predominantly red state. Employment hubs like San Francisco, San Diego, and Los Angeles have particularly prohibitive housing costs. Compare 2018’s average housing affordability of the United States, 53, to HAI of California, 26. This means that in 2018 only 26% of Californians could afford a median-priced home in their state. On the national level, 53% of Americans had the necessary income to qualify for a median-priced home in their state.

The average sales price of a home grew by almost 1700% in the last 50 years

When determining housing affordability the price of housing is, obviously, the major factor. Historically low mortgage rates mean nothing if you can’t afford the price of even the most modest houses.
In 2022 Q3, the average sales price of a home was $535,800. That is nearly 17 times the average sales price in 1972 Q3, $31,600. Of course, you expect house prices to rise. After all, most people also view their home as their largest investment. But when prices increase at such an alarming rate, it can push large sections of the population outside the housing market.
For comparison, the above chart includes the median sales price alongside the average for each quarter. The average price of homes can be distorted by homes that sell for very high or low prices. Another thing to keep in mind when considering these statistics is that you need to take into account inflation to get a real understanding of how prices have changed. Sure, maybe the average price of a house in 1972 was $31,600. But the median household income was also $11,120. A gallon of gas cost 34 cents. And you could buy a dozen eggs for 52 cents.
The graph above compares the median house prices from 1963 to 2022 with the same prices adjusted for inflation to January 1991 values. For instance, in October of 2022, a median home sold for $467,700. This amount in October 2022 dollars is equivalent to $211,241 in 1991 dollars.
As you can see, when you take inflation into account, home prices have risen gradually and fairly consistently over time. However, recent inflation-adjusted prices have risen more rapidly that the gradual norm. In fact, their rise since 2019 (perhaps even since 2011) resembles their rise during the housing bubble in 2005/2006. This could suggest we are in a housing bubble and can expect the median price to drop significantly in coming months. But there is another factor to consider.

New homes are 57% larger than 40 years ago

Inflation and housing bubbles are not the only drivers of house prices. A taste for larger and larger homes has also played a role. The graph below shows the correlation between the median footage of new homes and their sales price. The size of homes is a major factor that is often ignored. Today, the median-sized new home is 891 feet larger than in 1981.
When you also factor in inflation, the price per square foot has remained relatively stable. However, it did rise above its historical norm in 2020–2021, past even its prior peak in 2004–2005. In 2021 dollars, the price per square foot of a new home was $33 more in 2021 ($168.55) than in 1981 ($131.00), nearly a 28.66% increase. This is consistent with the theory that we are in, and possibly reaching the end of, a housing bubble.
Of course, this only shows the overall price for the entire United States. Things get messier when you look at prices at the regional level.
The Northeast and the West show the greatest price increases: $70.83 and $63.65 since 1978. However, in the Midwest, the price per square foot rose only $3.13 in inflation-adjusted terms. In the South, prices have tracked the overall United States prices.

The housing market and foreign investors

One of the reasons prices are so high, particularly in big cities, is foreign investment. Since 2008, for instance, Chinese real estate investors have spent tens of billions of dollars on commercial properties in the United States. Often, they’ve overpaid to acquire hotels, office buildings, and empty lots to build new residential spaces.
But all of that came crashing down in the second quarter of 2018. For the first time in a decade, Chinese insurers and conglomerates sold more than they acquired. Between April and June of that year, they purchased a little less than $130 million worth of real estate, while offloading $1.29 billion worth.
Chinese purchases of commercial property have recovered only slightly since then. Over the four quarters from Q4 2020 to Q3 2021, Chinese buyers — among whom the National Association of Realtors (NAR) includes buyers from mainland China, Hong Kong, and Taiwan — averaged $185 million in acquisitions per quarter. (Source.)
Chinese purchases of U.S. residential property (existing homes), meanwhile, dropped from from $31.7 billion in 2017 to a low of $4.8 billion in 2021. Sales rose in 2022, having already reached $6.1 billion when the NAR issued its 2022 report on international transactions in U.S. residential real estate (source).

Baby Boomers and generational housing bubbles

Baby boomers, people who were born between 1946 and 1965, own 33.4 million homes: four out of every 10 in the nation.
High homeownership rates are usually considered a positive economic marker. However, in recent years economists have been concerned about the increased prevalence of mortgage debt among older homeowners. In the past, paying off your mortgage before retiring was an honored and common rite of passage. In 2015, only 36.9% of Boomers owned their homes free and clear, according to a Fannie Mae study. The same study showed that the oldest Boomers (65–69), who have already retired, were 10% less likely to own their homes without a mortgage than pre-Boomers. Another study by Fannie Mae valued the total inventory of homes owned by Boomers and pre-Boomers at $13.5 trillion, or 75% of the U.S. annual economic output when the study was completed (source).
The concern is that Boomers will no longer be able to afford their homes and start unloading tens of millions of homes on a housing market that doesn’t have the buyers to meet that supply. A glut of unsellable properties could trigger a dramatic drop in house prices and create the greatest real estate crash in American history.
The NAR’s chief economist, Lawrence Yun, dismissed Fannie Mae’s gloom-and-doom predictions when they were issued (source). However, rising interest rates, and inflation-driven financial challenges facing homeowners and renters alike, have already led most analysts to expect housing prices to drop in 2023. These could make Fannie Mae’s earlier fears relevant today.

Adjustable Rate Mortgages

Market rate fluctuations are also a factor for some buyers in their choice of a fixed-rate loan or adjustable-rate mortgage (ARM). When rates rise, buyers tend to shift from the safer fixed rate to the riskier ARM. This decision is driven by the monthly payment, which can be more affordable with an ARM — if market rates don’t increase sharply in the future.
The volume of mortgage refinancing is especially sensitive to market rate fluctuations. When rates for new 30-year mortgages drop, as they did in early 2015 and mid-2016, homeowners rush to refinance. When rates rise, homeowners lose interest in refinancing, unless they want to trade an ARM for a fixed-rate loan or remove a borrower, perhaps due to a divorce or other financial life changes.

Is getting a mortgage and buying a house the only path to financial success?

Homeowners can accumulate wealth by paying off an initial purchase-money mortgage over time until they own their home free and clear. Historically, this opportunity has turned out well for many homeowners over the long term. Still, some people argue that renting a home and investing in other assets is a better strategy to become wealthy.
A 2012 study published by the Journal of Housing Research found that “renting creates higher wealth than ownership in the majority of cases” — if individuals diligently reinvest the difference in their housing cost. For many, that’s a tough “if” to ask (source).

Mortgage demographics

Federal law makes it illegal for lenders to discriminate in mortgage lending.
The borrower’s race, color, religion, national origin, sex, marital or familial status, age, handicap, or receipt of income from a public assistance program cannot be used to approve or deny a mortgage application or influence the type of mortgage or rate that a borrower is offered (source). States also have laws that protect certain groups of people from such discrimination.
Despite fair housing laws, research has found statistical correlations suggesting (to many analysts) that discrimination persists. One study of 2015 data found mortgage application denial rates of 27.4% for black applicants, 19.2% for Hispanic applicants, and 11% for white and Asian applicants.
“Throughout the boom, bust and recovery phases of the housing cycle, blacks have been denied home loans at higher rates than most other racial groups, (the exception being Native Americans, and even then only in the last few years) and Hispanics have been denied at higher rates than non-Hispanics,” the Pew Research Center concluded.
Hispanics and Asians were most often rejected for having too much debt relative to their income while blacks were turned down due to having a poor credit history.
The volume of applications from blacks declined from 1.1 million, or 5%, of applications, in 2005 — a peak year for applications overall — to just 132,000, or less than 4%, in 2015. (Source.)

Mortgages for Millennials

Millennials, born between 1981 and 1997, are an important demographic group for today’s mortgage lenders and housing markets. These 70 million people are currently (or recently) in their prime years to buy a first home or trade up to one with a bigger mortgage.
In 2017, the homeownership rate for Millennials was 36%. According to the National Association of Home Builders, Millennial buyers are choosing townhomes (or even tiny homes) as an affordable alternative to detached houses. They also like homes with three bedrooms, two bathrooms, outdoor space, multipurpose rooms, and quartz countertops.
As a group, Millennials say student debt has made it harder for them to purchase a home (source). When surveyed in 2017 about reasons for not having purchased a home, student debt played an outsize role in their responses (source).
Still, Millennials have been growing as a percentage of home buyers.
In October 2020, 53.1% of total closed mortgages to buy a home were made to Millennials, up from 43% in December 2017. Many Millennials are choosing a conventional 30-year mortgage (source).

Homeownership rates rise

Homeownership steadily declined from 2004 to 2017 but has since been on rise. What has caused this?
Two causes stand out. First, the financial crisis made it hard for many to qualify for mortgages. Even households who could afford and qualify for a mortgage may have been wary about investing in real estate. But, prior to increases seen in 2022, interest rates were at historically low levels. This allowed the homeownership rate to rise in most years 2017–2022.
The second reason may be that people are less interested in moving to the suburbs. Many prefer to live closer to where they work and have a wider selection of entertainment and cultural opportunities. However, downtown properties are scarce and expensive. This trend has encouraged the conversion of commercial buildings and zones into apartments that can satisfy the demand for rental properties. Recently, though, an increase in remote working may also be playing a role in workers moving to lower-cost areas where they can afford to buy.

Mortgage rate outlook

After several years of incredibly low rates, mortgage rates are rising briskly. Fed rate increases meant to stem inflation have played a role in this, no doubt. Historically, mortgage rates tend to track the 10-year U.S. Treasury rate, delinquency patterns on existing mortgages, and the perceived risk of an economic downturn (source). While a large increase in mortgage delinquencies has not been observed, perceived risk of an economic downturn is strong and growing. And Treasury yields are now rising, with, for instance, three-month treasuries having risen 448 basis points (4.48%) over the last year, as of March 1, 2023 (source).
As of this writing, the national average for 30-year fixed-rate is 6.95% (the 15-year average is 6.23%, and additional increases will not surprise anyone. If there is any good news in this, it’s that, as rates rise, the amount you can save by comparing multiple loan offers for the best rate also rises (source).

What are some factors that help determine mortgage rates?

The Fed can influence the cost of borrowing money for the banks, but there is more involved when determining the mortgage rates of consumers. Interest rates are determined by multiple factors, such as your credit score, the state you live in, the loan amount, the down payment, the loan term, the interest rate type (e.g., fixed vs. variable), and the loan type (i.e., conventional, FHA, USDA, VA loans).

Should people consider buying or refinancing a house now or should they wait?

Since rates are on the rise, you should ask yourself a few question: (1) Do I expect these rates to stay high, even continue to rise? (2) Or do I, instead, believe they will not stay elevated long and will drop back to lower levels relatively soon? (3) How urgently do I need to buy or refinance a house?
If you expect rates to remain high or rise, you will likely only want to consider a mortgage refinance if it will get you out of an ARM with potentially higher rates in the future or save you from defaulting on your current mortgage. If you meant to refinance when rates were lower but never got around to it, you may want to pursue a refinance if current rates are still lower than the mortgage you have. If you expect rates to drop in not too long, you may prefer to wait and see what happens.
As far as buying a home, it is a little more complicated. Rates have risen out of their historical lows, but higher rates are far from unknown. If you need a home urgently and don’t expect rates to drop again soon, buying sooner rather than later could get you a cheaper loan. However, more analysts than not are now expecting home prices to drop in the near future, particularly in the most overheated markets. Interestingly, the latest Gallup survey shows that only 30% of Americans feel it is a good time to buy a house. That is the lowest percentage since Gallup started asking in 1978 as Americans are usually bullish about the housing market. (Source.)

Unsecured loans and home equity loans

At SuperMoney we are seeing a tightening of credit models among alternative, non-bank unsecured lenders who appear to be preparing for a down cycle. However, consumer financing demand continues to grow.
As both the unsecured lending market tightens and cash-out refi market becomes less viable, we expect a shift of consumer demand towards home equity lines of credit and home equity loans in 2023. Startups like Figure are driving operational efficiency to secured lending and could stand to benefit from the market shift.
We expect to see more widespread adoption of shared equity appreciation products in 2023. Companies like Hometap, Unison, and Noah are helping consumers tap into home equity by sharing a percentage of your home appreciation instead of charging interest. This can be helpful to first-time homebuyers in need of a down payment or existing homeowners looking to tap into their equity.

Shopping around for a mortgage

Borrowers who shop around and compare offers from multiple lenders can save a lot of money when they get a mortgage. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for 30-year fixed-rate mortgages varied from a low of 3.55% to a high of 7.08% between February 2022 and 2023 (source). That 3.53% range is significant. For a $300,000 mortgage, it would mean a difference of $236,351 in total cost of the life of the loan.
The year with the most dramatic spread was 1980, which had a 4.17% difference between the low and high mortgage rates. Using that spread and the same $300,000 mortgage, the difference in total cost over the life of the loan would exceed the principal of the mortgage: $356,968.
The graph below shows the difference in total cost between the high and low rates and the average total cost.

Mortgage rates, monthly payments, and the importance of applying with several lenders

The variability in interest rates can also determine whether the monthly payments of a mortgage are affordable. For example, in 2008, monthly payments varied by nearly $300 depending on whether your mortgage rates were on the high or low end of the spectrum.
It’s clear that shopping around for the lender with the best possible rate is a good investment of your time. However, most people only check their rates with one lender.
The number of different lenders/brokers considered before choosing where to apply for a mortgage.
The number of lenders borrowers ended applying to. Source: Consumer Finance Protection Bureau
A Consumer Financial Protection Bureau study found about half of the people who got a mortgage to buy a home seriously considered more than one lender or mortgage broker before they applied. But 77% stopped shopping after they applied with one lender.
However, rates and fees vary significantly from one lender to another. Comparing rates and terms from several lenders could save you hundreds of thousands of dollars. The savings are even more dramatic if you bought your mortgage when interest rates were high and you can refinance it at lower rates. SuperMoney’s mortgage comparison tools make it easy to compare the rates and terms of leading mortgage lenders.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

Loading results ...

Andrew Latham

Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.

Share this post:

You might also like