“Customer for life” strategies abound in the mortgage industry. How lenders and loan originators implement those strategies varies, but the ambition remains the same — to win their borrower’s business every time the need for a mortgage arises.
Why a borrower chooses a particular lender comes down to a variety of factors, from quality of service and ease of process to the mortgage rate and loan products available. Different lenders operate in different niches and cater to different borrowers’ profiles.
Small borrower decisions can lower the rate a lender offers, decreasing the borrower’s monthly payment and leading to savings over the life of their loan. All else equal, a borrower could improve their credit score or increase the downpayment amount, for example.
But in a report from Realtor.com, economists say the “most powerful” way for a borrower to achieve rate savings is to shop their lender.
Analyzing nearly 2 million mortgage originations between 2023 and 2024 from Freddie Mac’s Single-Family Loan-Level Dataset, the listings platform’s research determines “lender choice offered the greatest potential rate savings, with rates differing by up to 0.55 percentage points between the most and least expensive options.”
A homebuyer with a 20% downpayment on a $425,000 median-priced home would save $122 per month, $1,464 per year and $43,929 over the life of the loan with a 6.05% versus 6.6% mortgage rate — a 0.55-basis point spread between the most and least expensive options during the period, the report explains.
“Even in a challenging homebuying market with sustained high mortgage rates, there’s room for strategy,” said Jake Krimmel, a senior economist at Realtor.com. “Focusing on what you can control — improving credit, saving more, and comparing offers — can make a measurable difference in affordability.”
Improving one’s credit score or increasing downpayment size may not be an affordability lever all borrowers can pull. A homebuyer’s timeline to purchase also influences the viability of these options. Shopping lenders for better pricing is an option for all borrowers, though any combination of these strategies may help lower a borrower’s mortgage rate.
According to Realtor.com’s analysis, raising a credit score from “good” (660-720) to “very good” (720-760) could yield a 0.11 basis point mortgage rate reduction, which on a median-priced home of $425,000 equates to roughly $8,700 in savings over the life of the loan.
Danielle Hale, Realtor.com’s chief economist, stated in the report that while mortgage rates are expected to ease as the Federal Reserve cuts its policy rate, “homebuyers who adjust the key factors that influence their individual borrowing costs can make the most of this or any moment.”
