New Bankrate data shows LA homebuyers lose $8,139 a year to preventable costs, with most major metro borrowers affected
The nation's 10 most populous metro areas have a costly mortgage overpayment problem — one that hits city-based borrowers with between $4,425 and $8,139 a year in entirely preventable expense.
That is the conclusion of new research from Bankrate, which analyzed 3.2 million Home Mortgage Disclosure Act (HMDA) loan originations from 2025 and compared them against binding, competitive offers available in Bankrate's lending marketplace.
Controlling for 17 borrower-specific risk factors, the analysis found that 83% to 88% of borrowers in each of the 10 largest US markets paid more than competitive pricing required.
Los Angeles tops the rankings at $8,139 in average annual overpayment, affecting 83% of borrowers, a figure that compounds to nearly $150,000 over a 30-year loan.
Miami follows at $6,358 a year (88%), New York City at $6,012 (84%) and Washington, D.C. at $5,816 (84%).
Sun Belt markets are not spared: Dallas borrowers overpay by $5,320 annually, Phoenix by $5,089, and Atlanta by $4,851.
The national average stands at $3,343 per year, with Chicago and Houston the only two large markets where the overpayment rate equals or exceeds the 87% national figure.
The pattern is not new. June 2026 analysis of the hidden homeownership tax found that 90% of conventional loan borrowers nationally pay above competitive market rates. That figure runs higher than the overpayment rates recorded for FHA and VA borrowers, where consumer protections constrain lender pricing discretion in ways the conventional market does not.
| # | Metro area | Annual overpayment | Lifetime overpayment | Borrowers overpaying |
|---|---|---|---|---|
| 1 | Los Angeles–Long Beach–Anaheim, CA | $8,139 | $149,073 | 83% |
| 2 | Miami–Fort Lauderdale–West Palm Beach, FL | $6,358 | $118,045 | 88% |
| 3 | New York–Newark–Jersey City, NY-NJ | $6,012 | $110,836 | 84% |
| 4 | Washington–Arlington–Alexandria, DC-VA-MD-WV | $5,816 | $97,844 | 84% |
| 5 | Dallas–Fort Worth–Arlington, TX | $5,320 | $84,754 | 88% |
| 6 | Phoenix–Mesa–Chandler, AZ | $5,089 | $83,677 | 84% |
| 7 | Atlanta–Sandy Springs–Roswell, GA | $4,851 | $80,244 | 86% |
| 8 | Houston–Pasadena–The Woodlands, TX | $4,626 | $74,558 | 87% |
| 9 | Chicago–Naperville–Elgin, IL-IN | $4,457 | $81,810 | 88% |
| 10 | Philadelphia–Camden–Wilmington, PA-NJ-DE-MD | $4,425 | $80,517 | 86% |
| — | National average | $3,343 | $78,186 | 87% |
Source: Bankrate, analysis of 3.2 million HMDA mortgage originations from 2025 (published September 1, 2026). Lifetime overpayment calculated over 30 years. Annual overpayment is the 8-year expected overpayment divided by eight, reflecting average mortgage lifespan and front-loaded amortisation costs.
Why most borrowers never get a competitive offer
Structural friction, not individual carelessness, drives the overpayment pattern. According to the National Survey of Mortgage Originations, 49% of homebuyers seriously consider only one lender before closing, handing that lender pricing power that rarely works in the borrower's favor.
"I think there's often a lack of awareness," said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
"What could be going on, too, is you worked with someone in the past, and so you're not shopping around based on your current financial situation."
Agent-referred lenders compound the problem. Todd Newpher, a lead mortgage origination manager at Pennsylvania State Employees Credit Union, said that agent relationships prioritize familiarity over competitive pricing.
"That's very unfortunate because most times those folks don't get the best deal that they could possibly get," Newpher said.
What this means for brokers
ICE's August 2026 Mortgage Monitor showed borrowers with nearly identical credit profiles locking rates with a 38-basis-point spread. That's roughly $5,790 in additional costs over the first five years of a $300,000 loan, with the spread widening to 47 and 48 basis points for FHA and VA borrowers respectively.
For brokers, the Bankrate data maps the market opportunity directly: multi-lender access and transparent pricing are the tools most overpayers never had.
Older homeowners are among those most exposed, with borrowers aged 55 and older paying approximately 19% to 20% of their loan balance in excess interest over the life of their mortgage, compared to roughly 14% for borrowers under 35.
Bankrate recommends obtaining at least three competing mortgage quotes within a 14- to 30-day window, comparing annual percentage rates rather than headline figures, and scrutinizing discount points and origination fees before committing to a lender.
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