A new Zillow analysis suggests many homebuyers may be leaving significant money on the table by failing to shop around for mortgage rates, even as they spend months searching for the right home. According to Zillow’s Consumer Housing Trends Report, nearly seven in 10 mortgage shoppers submit only one loan application, a habit that can cost borrowers tens of thousands of dollars over the life of a mortgage.
The findings highlight a disconnect between the time buyers invest in finding a home and the minimal effort often devoted to comparing lenders.
"Buyers often spend months finding the right home, but only minutes comparing lenders," said Kara Ng, senior economist at Zillow Home Loans. "Even a small difference in rate can meaningfully shrink a monthly payment and expand the number of homes within reach. Affordability is tough enough today that buyers shouldn't overlook any potential savings."
Zillow’s analysis shows that on a typical U.S. home priced at $360,000, a buyer paying the November average 30-year fixed rate of 6.24% would owe about $2,345 per month. At 5.74% — a rate more commonly achieved by borrowers who compare multiple offers — that payment drops to $2,253, resulting in savings of roughly $1,100 annually. In November, that difference would have made approximately 22,000 additional homes affordable to a median-income household nationwide.
The savings are even more pronounced in higher-cost markets. In San Jose, a lower rate could translate into nearly $4,750 in annual savings, while six other expensive metros would see yearly savings exceed $2,000. In Dallas, rate shopping would have brought more than 1,200 additional listings within reach of a typical buyer — the highest total in the country.
Zillow noted that lenders evaluate credit profiles, loan types, and market conditions differently, often producing materially different quotes for the same borrower. Previous Zillow research found spreads of 90 to 130 basis points between the best and worst offers, while Freddie Mac has reported potential variations of 50 basis points.
