Realtor.com®: Shopping Around for a Lender Could Save Borrowers Up to $44,000 Over the Life of a 30-Year Loan

Rhea-AI Summary

Realtor.com (NWS) analyzed nearly 2 million mortgage originations (2023–2024) and finds borrower choices can materially change mortgage costs even when market rates are high. Key findings: lender shopping produced up to 0.55 percentage-point rate spreads (example: 6.05% vs 6.60% → $43,929 lifetime savings on a $425,000 home). Raising credit from "good" to "very good" averaged a 0.11 ppt discount (~$8,735 lifetime), while moving from 10% to 20% down improved rates by ~0.09 ppt and could save ~$101,355 over 30 years. Investment properties and second homes paid about 0.5 ppt more. Methods: OLS regression controlling for borrower, loan, property, market, lender, and geography.

Positive

• Lender choice can save up to 0.55 ppt
• Lender spread example: $43,929 lifetime savings on $425,000
• Credit jump (good→very good) ≈ 0.11 ppt → $8,735 lifetime
• 10%→20% down ≈ 0.09 ppt → $101,355 lifetime

Negative

• Investment/second homes face ~0.5 ppt higher rates
• Doubling down payment requires an extra $42,500 on a $425,000 home

Insights

Mortgage economics expert

Realtor.com analysis shows borrower choices, especially lender shopping, materially affect mortgage costs versus market rate moves.

Borrower actions change borrowing costs through three channels: credit score bands, down payment size, and lender selection. The analysis of nearly 2 million originations from 2023–2024 finds lender choice created up to a 0.55% rate spread, equal to $122 monthly, $1,464 annually, and about $43,929 over a 30-year loan for a $425,000 median house. Moving from "good" to "very good" credit averaged a 0.11% discount, while crossing to a 20% down payment produced a larger rate benefit and combined savings of roughly $101,355 over the loan life.

The key dependencies and risks are clear and constrained to reported facts: results rely on an Ordinary Least Squares regression applied to Freddie Mac loan-level data and control for many borrower, property, and timing variables. The findings therefore pertain to rates at origination and do not project future Fed moves or market rates. Watch the reported lender spread (0.55%), the credit-band break between 660–720 and 720–760, and the effect of hitting a 20% down payment; these are monitorable metrics tied to the analysis and to a typical 30-year mortgage time horizon.

Analysis of 2 million loans shows improving your credit score and boosting your down payment  can also offset market factors in shaping mortgage costs

AUSTIN, Texas, Oct. 23, 2025 /PRNewswire/ -- Mortgage rates may move with the market, but a new Realtor.com^® analysis of nearly 2 million mortgage originations shows that borrowers can play a bigger role in shaping their own costs than many may realize, even in a high-rate environment.

In the third quarter of 2024, for example, when the average mortgage rate was 6.60%, borrowers with stronger lending profiles secured rates as low as 6.25%, while others paid closer to 7.0%. On a $425,000 median-priced home with a 30-year fixed rate, borrowers at the low end of that range will save more than $60,000 over the life of the loan compared with buyers at the high end.

"After years of higher borrowing costs, even small rate improvements can open doors for more buyers," said Danielle Hale, chief economist at Realtor.com^®. "While mortgage rates are expected to ease as the Fed cuts its policy rate, homebuyers who adjust the key factors that influence their individual borrowing costs can make the most of this or any moment."

Borrower Decisions Drive $300-$3,330 in Annual Savings
Depending on their financial profile, borrowers could pay anywhere from $300 to $3,300 more per year in interest than peers with stronger credit, larger downpayments, or better-shopped loans, a difference that adds up to tens of thousands of dollars over the life of a typical 30-year mortgage.

"Not all improvements have the same payoff," said Jake Krimmel, senior economist at Realtor.com^®. "The data show that hitting key thresholds, like moving from 'good' to 'very good' credit or putting 20% down, matters more than chasing perfection. Even modest adjustments in the right areas can shift a buyer's rate enough to save tens of thousands over the life of a loan."

Comparing Lenders Has the Biggest Impact on Rates, Saving Borrowers up to $44,000
Shopping and negotiating across lenders isn't just one of the easiest ways for buyers to influence their mortgage rates—it's also the most powerful. Among all factors studied, lender choice offered the greatest potential rate savings, with rates differing by up to 0.55 percentage points between the most and least expensive options. That gap is larger than the typical difference between "good" and "excellent" credit scores or between small and large down payments.

To put that in perspective, for a buyer putting 20% down on a $425,000 median-priced home, a 6.05% rate versus a 6.6% rate—a 0.55-point spread—equates to $122 in monthly savings, $1,464 per year, and $43,929 over the life of the loan.

Unlike raising a credit score or doubling a down payment, shopping around is an opportunity that's available to every borrower, regardless of financial position, especially for those planning to purchase during the seasonal Best Time to Buy, when listings, prices, and competition typically align most favorably.

Key Credit and Down Payment Milestones Can Save Borrowers More than $100,000 in Loan Payments
When it comes to credit, the most meaningful improvement came not from exceeding the 760 mark, but from raising scores from "good" (660–720) to "very good" (720–760), which yielded an average 0.11-percentage-point discount. This earns borrowers savings of $24 per month; $288 per year, and $8,735 over the lifetime of the loan.

Down payments, while harder to change, can have a much larger impact. Crossing the 20% down payment threshold produced more than twice the rate benefit of smaller down payment increases. For the same median-priced home, moving from a 10% to 20% down payment not only reduces the loan amount but also improves the rate by an average of 0.09 basis points. Together, those factors add up to about $281 in monthly savings, $3,372 per year, and $101,355  over the life of the loan.

While these savings are significant, doubling a down payment, which means an extra $42,500 at today's home price, can be a difficult step for buyers. That's why understanding other levers — such as improving credit or comparing lenders — remains essential for affordability, especially for first-time or cost-sensitive buyers.

Borrowers Pay More for Investment and Nontraditional Properties
Borrowers purchasing second homes or investment properties paid, on average, roughly 0.5 percentage points more than those buying a primary residence. Property structure matters, too: manufactured homes, condos, and co-ops carry higher rates than single-family homes, while planned unit developments (PUDs) tend to have lower rates.

"Even in a challenging homebuying market with sustained high mortgage rates, there's room for strategy," Krimmel said. "Focusing on what you can control — improving credit, saving more, and comparing offers — can make a measurable difference in affordability."

Methodology
We analyzed nearly 2 million mortgage originations between 2023 and 2024 from Freddie Mac's Single-Family Loan-Level Dataset using statistical methods that allow us to determine what factors best influence—all else being equal—a borrower's mortgage rate at origination.

Specifically, we employ an Ordinary Least Squares regression model predicting an individual borrower's actual received mortgage rate as a function of various borrower and property characteristics. The characteristics include the following: borrower FICO score, cumulative loan-to-value, debt-to-income ratio, original loan amount, property type, units in the structure, loan purpose, occupancy status, number of co-borrowers, loan term, loan channel, first-time homebuyer status, the 10-year Treasury yield during the month of origination, the metropolitan area or state of origination, lender name, calendar month of origination, and quarter of origination. The full set of regression model results are available upon request.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact: press@realtor.com 

 

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SOURCE Realtor.com

FAQ

How much could lender shopping save NWS-era borrowers on a 30-year loan?

Realtor.com found lender choice can differ by up to 0.55 ppt, equating to about $43,929 lifetime savings on a $425,000 home.

What rate benefit does improving credit from 'good' to 'very good' deliver for NWS borrowers?

Moving from 'good' (660–720) to 'very good' (720–760) averaged a 0.11 ppt discount, ~$8,735 over 30 years.

How much can a 10% to 20% down payment change mortgage costs for NWS buyers?

Increasing from 10% to 20% down improved rates by about 0.09 ppt and could save ~$101,355 over a 30-year loan on a $425,000 home.

Do investment properties pay higher mortgage rates according to Realtor.com (NWS)?

Yes; buyers of second homes or investment properties paid about 0.5 ppt more on average than primary-residence buyers.

What dataset and method did Realtor.com use for the NWS analysis on Oct 23, 2025?

They analyzed nearly 2 million originations (2023–2024) from Freddie Mac’s Single-Family Loan-Level Dataset using an OLS regression controlling for borrower, loan, property, lender, market, and geography.

How much could borrower decisions affect annual interest costs per Realtor.com (NWS)?

Depending on profile changes, borrowers could pay about $300–$3,300 more per year in interest versus peers with stronger profiles.