Average mortgage offer APR inches up for borrowers with excellent profiles

The best offers for borrowers with excellent profiles recorded an average APR of 4.26% for conforming 30-year fixed purchase loans in April, an increase from the 4.25% average in March, according to the monthly Mortgage Offers Report released by LendingTree.

Refinance loan offers slipped one basis point to 4.23%. The report analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree's network.

Average borrowers saw the average APR for conforming 30-year fixed purchase loans increase seven basis points to 4.92%. The loan note rate of 4.81% hit the highest since March 2016 and was up six basis points from March.

The APR spread between consumers with the highest credit scores at over 760 and consumers with scores of 680 to 719 increased by two basis points to 29 basis points from March. The April spread was the widest since LendingTree’s data series began in March 2016. Consumers with the highest credit scores saw offered APRs of 4.78%, versus 5.07% for the other group of consumers.

LendingTree said the spread represents almost $15,000 in additional costs for borrowers with lower credit scores over 30 years for the average purchase loan amount of $234,437.

April also recorded a 6-basis-point increase in the refinance APRs for conforming 30-year fixed loans to 4.89%. The credit score bracket spread remained at 24 basis points, amounting to nearly $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $239,199.

"We are in the core of the spring selling season for homes," LendingTree Chief Economist Tendayi Kapfidze said. "Supply problems are dampening sales of existing homes and are particularly acute for lower-priced homes. Sales for homes under $100,000 were down 21% Y/Y in March, and those between $100,000 and $250,000 were down 8% Y/Y. Low inventory is the defining characteristic of the current housing market, and buyers should do all they can to position themselves competitively. We advise improving your credit score, getting financing in place ahead of the house hunt, and shopping around for the best mortgage rates."