For many prospective homebuyers, the dream of owning a home is being challenged by high mortgage rates. However, a recent study reveals that substantial savings are possible through comparison shopping among different mortgage lenders. According to LendingTree, the average borrower could save $76,410 over the life of a 30-year loan by seeking the best rate.
“Different lenders have different standards and criteria that they look at when deciding who to lend to,” says LendingTree senior economist Jacob Channel. “It’s for that reason that different lenders can offer such drastically different rates to the exact same people. And, by extension, it’s also why shopping around for a lender can help homebuyers save so much money.”
The study highlights that in five states, the lifetime savings from finding the best mortgage rate surpass $100,000. These states are:
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California: $131,190
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New Jersey: $127,125
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Hawaii: $115,947
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Washington: $115,026
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Minnesota: $103,555
Yet, the benefits of comparison shopping for mortgages extend across all states. Even in South Dakota, where the savings are the lowest, borrowers could still save over $35,000 over the life of their loan by shopping around, according to LendingTree.
The new report, based on data from 34,000 LendingTree users who received two or more offers from mortgage lenders in 2024, shows the potential savings. These savings reflect the average difference between the highest and lowest rates offered to those borrowers.
On a standard 30-year fixed mortgage, even a small difference in interest rates can translate to significant savings. For example, on a loan amount of $300,000, increasing the mortgage rate from 7% to 7.1% adds about $7,270 in interest payments over the life of the loan.
According to Freddie Mac, average rates on 30-year fixed mortgages stood at 7.03% for the week ending May 30. Over the past year, rates have ranged from 6.6% to 7.79%.
LendingTree found that nationwide, the spread between the highest and lowest mortgage rates offered to borrowers with multiple offers averaged 0.92 percentage points. Minnesota had the largest spread between the highest and lowest rates, at 1.46 percentage points. Significant rate spreads were also noted in Nebraska (1.38 percentage points) and Wisconsin (1.35 percentage points).
Below is the full ranking of how much borrowers can save in each state by shopping around for the best mortgage rates: