This Simple Homebuying Step Can Save You Over $1K a Year
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Most homebuyers spend weeks touring properties to find the perfect fit, but when it comes to mortgages, nearly 7 in 10 settle for the first offer they get. That decision can cost thousands. According to a new Zillow report, the average buyer could save $1,100 a year by reducing their mortgage rate by just 50 basis points on a typical U.S. home.
Here’s why shopping around for your mortgage matters — and how to do it right.
Why Comparing Mortgage Lenders Pays Off
Accepting the first mortgage offer might feel convenient, but it often means leaving money on the table.
“Most buyers don’t need to talk to every lender in town to see meaningful benefits,” said Kara Ng, senior economist at Zillow. “Getting quotes from two to three lenders strikes a smart balance. It’s enough to surface real differences in rates and fees without turning the process into a second full-time job.”
How Lower Rates Add Up to Big Savings
A fraction of a percentage point might seem minor, but it adds up fast.
“A lower rate pays dividends month after month,” Ng said. “Even a modest improvement can shave hundreds off a monthly payment and add up to thousands in savings over the life of a loan. That kind of relief gives households more breathing room long after closing day.”
Lower Rates Can Expand Your Home Options
Better rates don’t just save money — they can expand your options.
“Lower monthly payments can bring more homes within budgetary reach and help keep debt-to-income ratios in check — one of the biggest hurdles buyers face when qualifying for a loan,” Ng said. “In tight markets, that extra flexibility can make the difference between an uncomfortable stretch and buying with confidence.”
Steps To Lock In the Best Mortgage Deal
Before applying for a mortgage, set yourself up for success.
“Preparation goes a long way,” Ng said. She recommended:
- Checking your credit and addressing any issues.
- Paying down existing debt to improve your financial profile.
- Understanding what you can comfortably afford.
- Talking with multiple loan officers to help clarify options.
- Utilizing tech-powered tools, like Zillow’s BuyAbility, to see how your financial profile translates into real homes and explore down payment assistance programs.
Shopping for a mortgage may feel like extra work, but the payoff — thousands in savings and more home choices — is worth it.
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