A significant majority of homebuyers are potentially leaving substantial money on the table by failing to shop around for mortgage rates, according to new data. Despite the significant financial impact, 69% of buyers submit only one mortgage application, Zillow reports. With average interest rates still above 6.2% and home prices up 45.8% since early 2020, experts warn that this single decision could cost borrowers tens of thousands of dollars over the life of their loan.

“In my experience, shopping around for a mortgage is one of the most overlooked opportunities for consumers to improve their financial outcome,” said certified financial planner Mike Casey of AE Advisors. Many borrowers default to lenders recommended by real estate agents or their existing bank without exploring alternatives.

The High Cost of a Single Application

The financial stakes are considerable. On a typical $360,000 mortgage, a half-percentage-point difference in rate—from 6.25% to 5.75%—could save a borrower $115 per month and over $41,000 in total interest across a 30-year term. A 2023 Freddie Mac study noted that rates can vary by a full percentage point among lenders, making comparison shopping a critical step in the home financing process.

Beyond the interest rate, closing costs also vary widely and warrant scrutiny. These fees, covering title insurance, property taxes, and lender charges, can sometimes be negotiated. Borrowers should evaluate whether paying points (upfront fees equal to 1% of the loan) to secure a lower rate aligns with their long-term plans.

Smart Shopping Protects Your Credit Score

A common concern about multiple applications is credit score impact. However, credit scoring models typically treat multiple mortgage inquiries made within a short window as a single hard inquiry. “If you rate-shop by applying for three different loans, all three inquiries will appear on your report, but they’ll only count as a single inquiry,” explained Margaret Poe of TransUnion.

To minimize impact, experts recommend submitting all applications within a 14-day period, though some models allow up to 45 days. This strategic approach allows borrowers to gather competitive offers without significantly harming their credit profile—a key consideration in today’s tight lending environment.

A Crucial Step in an Expensive Market

With the average home price now at $359,241, even modest savings on mortgage terms can provide meaningful relief to budgets stretched by high housing costs, groceries, and utilities. As Kevin Arquette of WealthPoint Financial Planning noted, “Rates and closing costs can vary dramatically between lenders, and that can make a big difference over a 30-year term.”

For buyers navigating one of life’s largest financial commitments, a disciplined comparison strategy is not just advisable—it’s essential to ensuring long-term affordability and avoiding unnecessary interest expenses that can accumulate into a small fortune over time.