LendingTree®, a leading online lender, released its monthly Mortgage Offers Report, which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree's network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.
November's best mortgage offers for borrowers with the best profiles had an average APR of 4.66% for conforming 30-year fixed-rate purchase loans, up from 4.61% in October. The APR on refinance loan offers increased 1 basis point, to 4.63%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
For the average borrower, the purchase APR for conforming 30-year fixed-rate purchase loans offered on LendingTree's platform was 5.35%, up 8 basis points from October. The loan note rate of 5.24% is the highest rate of the year. We prefer to emphasize the APR, as lenders often make changes to other fees in response to changing interest rates.
Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.20%, versus 5.50% for consumers with scores of 680 to 719. The APR spread of 30 basis points between these score ranges is the same as it was in October. For the average purchase loan amount of $230,260, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 7 basis points from October to 5.33%. At 5.20% and 5.43%, respectively, the spread between credit score brackets (760-plus and 680 to 719) was 23 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,856.
Average proposed purchase down payments fell to $59,974, a decline of nearly $400.
The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders. We believe it is an important addition to standard industry surveys and reports on mortgage rates. Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20% down payment. Most borrowers do not fit this profile. Our report includes the average quoted APR by credit score, together with the average down payment and other metrics described below. We stratify by credit score, so borrowers have added information on how their credit profile affects their loan prospects. The report covers conforming 30-yr fixed loans for both purchase and refinance.
APR: Actual APR offers to borrowers on our platform
Down Payment: Though analogous to the LTV, we find that borrowers identify more closely with the down payment. Academic studies have also found that the down payment is the primary concern for homebuyers and one of the main impediments to entering the homebuying market.
Loan Amount: The average loan amount borrowers are offered
LTV: Actual LTV offered to borrowers on our platform
Lifetime Interest Paid: This is the total cost a borrower incurs for the loan, inclusive of fees.