Inaugural report combines mortgage offers spread, rates
Online mortgage marketplace LendingTree has launched a new mortgage comparison report.
Bringing together the platform’s Mortgage Rate Competition Index and a measure of Mortgage Rate Distribution, the weekly report is designed to show potential savings available to buyers.
"Data on mortgage rates is often presented as a single point value. However, the mortgage market does not work this way, and it's more informative to present mortgage rates as a distribution to represent diversity in pricing,” said Tendayi Kapfidze, Chief Economist at LendingTree.
He added that LendingTree's Mortgage Comparison Shopping Report does just this, improving consumers' understanding of the market by showing the range of rates that actual borrowers were offered on the LendingTree platform.
“With the intense attention on mortgage rates and their implications for the housing market, this is an important addition to the inventory of industry data," he said.
Data for week ending November 25
Mortgage Rate Distribution
- For 30-year fixed-rate mortgages, 37.4% of purchase borrowers received offers under 5%, up from 29.4% the prior week. A year ago, 98.1% of purchase offers were under 5%.
- Across all 30-year fixed-rate mortgage purchase applications on LendingTree, the most common interest rate was 4.875%, offered to 21.3% of borrowers.
- 27.9% of 30-year fixed-rate mortgage refinance borrowers received offers under 5%, up from 20.1% the prior week. A year ago, 98.1% of refinance offers were under 5%.
- Across all 30-year fixed-rate mortgage refinance applications, the most common interest rate was 5.00%, offered to 22.3% of borrowers.
Mortgage Rate Competition Index
- Across all 30-year fixed rate mortgage purchase applications on LendingTree for the week ending Nov. 25, 2018, the index was 0.59, down 0.06 from the previous week.
- How big of a deal is it to get a mortgage APR that's 0.59 percentage points lower than the competition? Over 30 years, that could translate to $27,454 in savings on a $300,000 loan.
- The index was wider than the purchase market in the refinance market at 0.70, down 0.02 from the previous week. Borrowers could have saved $32,737 by shopping for the lowest rate.
