How Mortgage Rate Shopping Can Save You Thousands Over the Life of Your Loan
When it comes to buying a home, most people spend weeks—sometimes months—searching for the right property. But how much time do you spend shopping for the right mortgage rate?
If you’re like many homebuyers, probably not enough.
The truth is, shopping around for the best mortgage rate can save you thousands—sometimes tens of thousands—of dollars over the life of your loan. In this post, we’ll break down exactly how those savings work, why rates vary between lenders, and how you can shop smarter (without the stress).
Why Mortgage Rates Matter More Than You Think
At first glance, a 0.25% or even 0.5% difference in interest rate may not seem like much. But over the course of a 30-year mortgage, that seemingly small difference adds up in a big way.
Let’s do the math:
Loan amount: $350,000
Term: 30 years
Rate A: 7.25%
Rate B: 6.75%
Rate A (7.25%)
Monthly Payment: $2,387
Total Interest Paid: $510,000
Rate B (6.75%)
Monthly Payment: $2,270
Total Interest Paid: $465,000
Savings by choosing Rate B: $117/month and $45,000 over the life of the loan.
Why Mortgage Rates Vary Between Lenders
Lenders don’t all offer the same rates—and they’re not required to. Mortgage rates can differ based on a number of factors:
Lender pricing strategies
Loan type and term (15-year vs. 30-year, fixed vs. variable)
Your credit score
Loan-to-value (LTV) ratio
Current market conditions
Points and fees included in the offer
That’s why getting a quote from just one lender is rarely a good idea.
The Danger of “Set It and Forget It”
Many buyers take the first mortgage rate they’re offered—often from their bank or preferred lender recommended by a realtor. While that may be convenient, it’s not necessarily cost-effective.
According to Freddie Mac, borrowers who get just one extra quote save an average of $1,500. Getting 5 or more quotes? The average savings jumps to over $3,000.
That’s real money—and in many cases, the only difference is asking for more options.
How to Shop Smart (Without Doing All the Work)
Shopping around doesn’t mean applying to a dozen lenders and drowning in paperwork. Here’s how to do it efficiently:
Check your credit first. Your score affects your rate—know where you stand.
Gather your documents. Lenders will want proof of income, employment, debt, and assets.
Use a rate comparison service. Tools like ours let you compare multiple offers in one place—saving you time and hassle.
Ask about fees. Always compare APR, not just the rate. This includes fees and gives a more accurate picture of the total cost.
Negotiate. If one lender offers a better rate, ask others to match or beat it. Many will.
Final Thoughts
Buying a home is likely the biggest financial decision you’ll ever make. Don’t let convenience cost you.
Mortgage rate shopping isn’t just smart—it’s essential. Even a fraction of a percent can mean thousands of dollars in savings. Whether you're a first-time buyer, refinancing, or upsizing, 806 Mortgage is here to help you find the best mortgage rate so you can save money and save time.
