Bankrate's study identifies four borrower profiles surrendering the most in excess mortgage costs
The Americans most financially equipped to secure a competitive mortgage rate are, statistically, the most likely to pay too much for one — a counterintuitive finding with direct implications for how brokers frame the case for comparison shopping with their strongest-profile clients.
New research from Bankrate analyzed 3.2 million Home Mortgage Disclosure Act (HMDA) loans against the lowest rates available in its marketplace at origination, finding that 87% of US mortgage borrowers overpay.
The typical overpaying borrower surrenders approximately $78,186 in excess interest over the life of a 30-year loan, according to the analysis.
The problem is not evenly distributed. Households earning $100,000 to $199,000 annually carry a 90% likelihood of overpaying, the highest rate of any income bracket tracked. Those earning $200,000 to $500,000 follow at 89%. Economists say the driver is not creditworthiness. It is habit.
Why well-qualified borrowers overpay
"People who don't shop likely have an existing [lender] relationship or have the income to where a small difference in the mortgage rate really doesn't mean that much to them," said Joel Berner, senior economist at Realtor.com.
The same pattern surfaces across debt levels. Borrowers with debt-to-income (DTI) ratios between 33.1% and 38% — the lightest debt loads in the dataset — post the highest overpayment rate of any DTI segment at 92%.
Alexei Alexandrov, a mortgage industry researcher and former chief economist of the Federal Housing Finance Agency (FHFA) in Washington, DC, attributed the gap to shopping behavior: financially stretched applicants simply seek more quotes.
"It's completely plausible that they request more quotes as opposed to someone who is super prime," he said.
Conventional loan borrowers — accounting for nearly 70% of the purchase market per a 2026 National Association of Realtors report — overpay at an 89% rate, ahead of Federal Housing Administration (FHA) borrowers at 83% and Veterans Administration (VA) borrowers at 81%.
Conventional loans carry risk-based pricing through loan-level price adjustments (LLPAs), a structural difference that widens rate variation across lenders and makes shopping more consequential.
Bankrate mortgage overpayment data: three tables showing overpayment rates and dollar amounts by income, debt-to-income ratio, and loan type.
By income bracket
| Annual household income | % that overpay | Annual overpayment | 8-year overpayment | Lifetime overpayment |
|---|---|---|---|---|
| Under $50k | 82% | $1,472 | $11,778 | $31,818 |
| $50k–$99k | 87% | $2,125 | $17,002 | $47,076 |
| $100k–$199k | 90% | $3,551 | $28,406 | $82,323 |
| $200k–$499k | 89% | $5,142 | $41,135 | $124,991 |
| $500k+ | 83% | $7,592 | $60,737 | $192,626 |
Highlighted row = highest overpayment rate by income bracket. Annual figures calculated by dividing the 8-year overpayment by 8, reflecting the average time a homeowner holds a mortgage. Lifetime = costs over a 30-year loan. Source: Bankrate, 2026.
By debt-to-income ratio
| DTI range | % that overpay | Annual overpayment | 8-year overpayment | Lifetime overpayment |
|---|---|---|---|---|
| 10%–33% | 91% | $3,616 | $28,929 | $85,814 |
| 33.1%–38% | 92% | $3,876 | $31,010 | $92,338 |
| 38.1%–45% | 86% | $3,127 | $25,019 | $73,127 |
| 45.1%–65% | 85% | $3,066 | $24,529 | $69,256 |
Highlighted row = highest overpayment rate by DTI segment. Source: Bankrate, 2026.
By loan type
| Loan type | % that overpay | Annual overpayment | 8-year overpayment | Lifetime overpayment |
|---|---|---|---|---|
| Conventional | 89% | $3,599 | $28,791 | $86,197 |
| FHA | 83% | $2,586 | $20,688 | $53,350 |
| VA | 81% | $2,922 | $23,375 | $67,090 |
Conventional loans are not exempt from risk-based loan-level price adjustments (LLPAs), widening lender rate variation and increasing the benefit of shopping. Source: Bankrate, 2026.
The data makes a broker's case for them
The overpayment trend extends to refinancing. Borrowers aged 55 and older — now the majority of American homeowners — overpay at an 81% rate, losing an average of $2,379 a year despite facing no closing deadline.
As mortgage brokers work to capture a greater share of the lending market the creditworthy, lender-loyal, and older overpayer represents a client segment the broker channel is well positioned to serve.
Amir Nurani, broker-owner of Left Coast Leaders in California, previously told Mortgage Professional America that making cost comparisons explicit is a proven approach for winning clients away from single-lender relationships.
"When you start pointing out to people that they're paying $7,000, $8,000, $12,000, $15,000 to obtain that rate and the fact that they could get that same rate with you without that cost, it becomes very attractive," he said.
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