Best vs. Worst Mortgage Rates: How Much Are You Overpaying If You Don’t Shop Around?

Posted on May 11, 2025 // 3 Comments

If you are looking at mortgages and figure that the market must be competitive and that all lenders should offer similar interest rates, then you should check out this Axios article and Tomo Mortgage whitepaper “The Truth about Mortgages” (via Abnormal Returns).

Here’s a chart comparing the best and worst mortgage rates over the past several years. (Best is the 5th percentile, Worst is the 95th percentile.) The gap has been as narrow as 0.5% and as wide as 2%. Right now, the gap is closer to 1%.

This difference between getting a top and bottom rate equates to a difference of ~$300 per month on a 30-year fixed mortgage. $300 a month, every month, for up to 30 years! That’s a potential $3,000+ every year that you’re overpaying just because you didn’t shop around adequately.

I’m not familiar with Tomo, but they do offer some easy rate shopping that includes both their rates and those of competitors. Tomo is only available in certain states.

Filed Under: Real Estate //

Comments

  1. Dansbooks says
    May 12, 2025 at 12:35 am

    Several years ago, I refinanced my 4.0% 30 year fixed mortgage into a 20 year mortgage at 2.5% fixed. Every time I get my statement, I can’t believe how perfect my timing was. Over 20 years, the savings will be over $100K.

    Reply
  2. NRI Wealth Management says
    May 19, 2025 at 4:40 am

    Whoa, this really puts things into perspective! I believe a lot of folks think mortgage rates don’t fluctuate all that much between lenders, but a 1% difference equating to $300 per month is enormous—especially over 30 years. That’s more than $90,000 just falling between the cracks if you don’t shop around. It’s a nice reminder that shopping around isn’t just wise—it’s paramount. Definitely worth taking the time to research or even work with a mortgage broker to make sure you’re not leaving money on the table.

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