Buying a House? This Overlooked Step Could Save You $1,200 a Year
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This Overlooked Step Could Save You $1,200 a Year By: Leslie Cook Leslie Cook Editor, Real Estate | Joined November 2019 Leslie Cook is Money’s lead real estate editor covering trends in the housing market, mortgage rates and real estate. She also writes about home renovation trends and tips. Has also written: Say What?
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Will It Actually Work? See full bio Published: Dec 17, 2025 11:36 a.m. EST 4 min read Money; Getty Images 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 $1,200 or more per year. Yet, according to a Zillow report published last week, 7 out of 10 prospective homeowners don't shop around for a better rate, opting instead to apply for a loan with a single lender. Whether it's because the loan application process seems complicated, borrowers have confidence in the first offer they receive or they believe that all lenders offer the same rates, the decision to only apply with a single lender "can be a missed opportunity that costs buyers tens of thousands of dollars over the life of the loan," as Zillow's senior economist Kara Ng wrote in the report. Ads by Money. We may be compensated if you click this ad.AdYour future dream home awaits — Unlock your interest rate nowStateALAKAZARCACOCTDEDCFLGAHIIDILINIAKSKYLAMEMDMAMIMNMSMOMTNENVNHNJNMNYNCNDOHOKORPARISCSDTNTXUTVTVAWAWVWIWYNew Loan TypeiNot sure which loan type to choose? Go with a 30 Year Fixed Rate Loan, 90%+ of Americans do.30 Year Fixed Rate Loan15 Year Fixed Rate Loan30 Year Fixed FHA Loan30 Year Fixed Veteran (VA) Loan7/1 Adjustable Rate Loan10/1 Adjustable Rate Loan30 Year Fixed Rate Jumbo Loan15 Year Fixed Rate Jumbo Loan5/1 Adjustable Rate Jumbo Loan7/1 Adjustable Rate Jumbo LoanLoan AmountiYou can enter the mortgage loan amount, or the total home price if you have a downpayment.$Have you served in the military?Find your actual rate at Rocket Mortgage (NMLS #3030) Today!View RatesEstimated interest rate*7.01%Money’s methodology:*Based on the U.S. average rate for consumers with an Exceptional Fico score (780+) getting a conventional loan, no points, and a 20% down payment. Actual rates may vary. Click "View Rates" to contact Rocket Mortgage (NMLS #3030) for a more accurate quote. For 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. Ads by Money. We may be compensated if you click this ad.AdBuy your home with more convenience and less hassleView RatesStreamlined loan application, 100% online 30-Year FHA 203(k) Jumbo & Adjustable Rate Loans Get pre-approved in minutes Receive custom mortgage solutions Customize loan terms and costs to fit your budget View Rates100% 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 View RatesGet rates & pre-qualified in minutes Low Rates: Quick Quote and Approval Rate Lock Protection.
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