Which lenders are offering some of the lowest rates? Their historical track record may offer some insights into which banks borrowers may want to investigate.
The Mortgage Reports analyzed data on every loan from the 24 largest lenders in 2018 and 2019 to identify which tended to offer the lowest interest rates and fees. The lenders topping their list for most competitive 30-year mortgage rates are:
USAA: best mortgage rates and fees combined (military only)
Bank of America: best mortgage rates and fees combined (non-military)
Bank of America: lowest average rate (bank)
Guaranteed Rate: lowest average rate (non-bank)
PNC: lowest average fees (bank)
Guaranteed Rate: lowest average fees (non-bank)
The Mortgage Reports cautions in its analysis, however, that mortgage rates can vary considerably from applicant to applicant depending on their financial situation and credit profiles. The analysts urge home buyers to shop around to find the best rates. But also be sure to take into account closing costs when shopping around. Closing costs usually average about 2% to 5% of the loan amount. On a $200,000 loan, that could amount to between $4,000 to $10,000 needed during settlement.
The Mortgage Reports found the lenders that offered the lowest loan costs in 2019 were PNC (whose average loan cost in 2019, stated as the percentage of the loan amount, was 0.88%), followed by Chase (1.01%), Wells Fargo (1.10%), and Guaranteed Rate (1.25%).
View charts at The Mortgage Reports to compare the average mortgage rates from the top 24 lenders and closing costs in 2019.
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Source: National Association of Realtors and “The Best Mortgage Rates: 5.9 Million Loans Analyzed to Find the Top Lenders,” The Mortgage Reports (May 19, 2020)