Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
Buying a House? This Overlooked Step Could Save You $1,200 a Year
By Leslie Cook MONEY RESEARCH COLLECTIVE
According to a Zillow report published last week, 7 out of 10 prospective homeowners don’t shop around for a better rate, opting instead to apply for a loan with a single lender. That’s a costly mistake.
You may be missing out on an easy way to save on your monthly mortgage payments — and make your next home purchase more affordable.
It turns out that most homebuyers skip an important step when applying for a home loan: shopping around. Research has shown that borrowers who apply for a home loan from at least four lenders save $1,200 or more per year. Yet, according to a Zillow report published last week, 7 out of 10 prospective homeowners don’t shop around for a better rate, opting instead to apply for a loan with a single lender.
Whether it’s because the loan application process seems complicated, borrowers have confidence in the first offer they receive or they believe that all lenders offer the same rates, the decision to only apply with a single lender “can be a missed opportunity that costs buyers tens of thousands of dollars over the life of the loan,” as Zillow’s senior economist Kara Ng wrote in the report.
Find your actual rate at Rocket Mortgage (NMLS #3030) Today!
View RatesFor example, a 30-year, $360,000 loan at Freddie Mac’s current rate of 6.24% would have a monthly payment of about $2,345. The payment on the same loan at a half-point lower rate would be about $100 lower, representing annual savings of about $1,100.
Those savings can multiply in markets where home values are more expensive, such as Seattle or San Jose, California.
At the same time, a lower rate allows a borrower to qualify for a larger loan amount, increasing the number of homes a prospective buyer can afford and, therefore, the number of buying options. Depending on the market, securing half-point interest-rate reduction could result in hundreds more homes that fall within a buyer’s budget.
Aside from shopping for the best interest rates, prospective buyers will have a better chance of finding their dream home in the new year. Market conditions are shifting in favor of buyers.
Mortgage rates have been on a downward trend since mid-July. These lower rates have already improved affordability for some buyers who were on the sidelines. This trend is likely to continue into next year, as housing experts forecast that mortgage rates will remain in the current low-6% range.
“This slight improvement in affordability actually unlocks some pent-up demand, especially for households who didn’t get to [buy] in 2025,” Ng says.
Another factor that will help improve buying conditions is slowing home price growth, which Ng says she expects to rise by about 1% next year. Those price gains are expected to be offset by wage growth, which is forecast to increase by 3.5%.
More disposable income, combined with lower monthly payments, is expected to make a home purchase more accessible to a wider segment of buyers.
Buy your home with more convenience and less hassle
Clear, reliable numbers from day one
- A streamlined online experience from start to finish
- Simple steps with expert guidance along the way
- Confidence at every stage of your homebuying journey
- Dedicated support for first-time buyers
100% online application available
- FHA Loans starting at 3.5% Down
- Save money upfront – 5/1 ARM home loan – great choice for homeowners.
- FHA Cash-Out Refinance Options Available
- 392k+ positive reviews, A rating from the BBB
Get rates & pre-qualified in minutes
- Low Rates: Quick Quote and Approval
- Rate Lock Protection. Lock Now Before Rates Go Up
- Pre-Approval Letter with Rate Lock Protection
- Over $130 Billion Funded. 23 Years in Business
No monthly payments required
- Borrow up to $600,000
- Repay when it's convenient for you
- Online quote tool won't hurt credit
- Apply entirely online
Shop for your mortgage and save thousands
- Compare multiple offers from top lenders
- Get market-beating rates, save up to $28,000
- No hard credit checks and sales pressure
- It's complete free - no cost to you, ever
NMLS #1450805 © RateGravity Inc. DBA Own Up
More from Money:
8 Best Mortgage Lenders of 2025
Trump’s 50-Year Mortgage Idea Is No ‘Silver Bullet’ for Housing Affordability
1 in 5 Homeowners Are Now Paying Mortgage Rates of 6% or Higher
Leslie Cook is Money's lead real estate editor, covering news stories about mortgages and how rate movements affect the housing market and writing and editing stories that inform our readers about real estate trends and how they affect homebuyers and sellers. Leslie writes a weekly newsletter, Money Moves, that covers a wide range of real estate topics in addition to her weekly articles. Her work has been featured on Apple News, MSN and ConsumersAdvocate.org. Leslie has been covering the mortgage and real estate industry at Money since 2019 and has interviewed industry leaders, such as Lawrence Yun, chief economist at the National Association of Realtors, and Glenn Kelman, CEO of brokerage Redfin. She has been a guest on the This Morning with Gordon Deal radio show, interviewed by The Mortgage Note, and served as moderator for ServiceLink’s State of Homebuying webinar. While at Money, Leslie has contributed to several of Money’s rating and ranking features, including Best Places to Live, Best Places to Travel and Changemakers. She has also played a major role in researching and selecting Money’s Best Banks rankings for the past four years. Before joining Money as a staff writer, Leslie was a reporter for Caribbean Business Newspaper in San Juan, Puerto Rico, covering human resources, telecommunications and computers. She graduated cum laude from Bryn Mawr College in Pennsylvania with a bachelor’s degree in history. The research and interviewing skills learned there have contributed to Leslie’s ability to provide accurate information on her area of expertise and elicit informative responses from her interviewees.