LendingTree Introduces New Mortgage Savings Tracker and Mortgage Rate Competition Index

Released  March 13, 2018
By Megan Greuling

CHARLOTTE, N.C., March 13, 2018 – LendingTree®, the nation’s leading online loan marketplace, today announced the release of its Mortgage Savings Tracker and Mortgage Rate Competition Index. The LendingTree Mortgage Rate Competition Index is a new measure of the dispersion in mortgage pricing and will be released weekly. Built on top of the Mortgage Rate Competition Index, the Mortgage Savings Tracker will bring a new transparency to mortgage shopping by highlighting the significant savings that are available to potential borrowers for both purchase mortgages and refinancing.
Mortgage Rate Competition Index
The Mortgage Rate Competition Index is a new proprietary measure of the dispersion in mortgage pricing that measures the spread in the APR of the best offers available on LendingTree relative to the least competitive. LendingTree’s research shows that mortgage rate competition varies with the financial and operational measures of activity in the mortgage markets. More details on the index are available in the LendingTree Mortgage Rate Competition Index White Paper.


Mortgage Savings Tracker
The Mortgage Savings Tracker is a tool that uses proprietary data to help measure savings available to potential mortgage borrowers for purchase mortgages and refinancing.
Each week, LendingTree will calculate the Mortgage Rate Competition Index, which measures the average difference of offers from lenders to individual borrowers for both purchase and refinance mortgages.
Using a standard loan size of $300,000, LendingTree will then calculate the lifetime savings on 30-year fixed loans. Some weeks the savings will be larger than others, but there will always be variations between rates because mortgage lenders have unique business circumstances that impact the rates at which they can offer consumers loans.

Findings from the inaugural report:

  • Across all purchase loan requests on LendingTree (we looked at refinance loan requests separately) in 2017, we found an average Mortgage Rate Competition Index of 0.46 — this was the average spread between the lowest and highest APR offered by lenders.
  • It may not sound like much, but over 30 years translates to $21,000 in additional costs on a $300,000 loan.
  • The index was wider in the refinance market, averaging 0.55. Potential borrowers there could have saved an average of $26,000 had they shopped around to find the lowest rate.
  • Ringing in the new year, the index widened to 0.59 for potential purchase borrowers, translating to a potential savings of just over $27,000.
  • For potential refinance borrowers, again, the index was even higher at 0.63. That could result in a savings of almost $30,000. The savings increased because lenders are reacting differently to the overall uptick in rates.
  • The most recent data for the week ending 3/11/2018 showed potential savings of $26,780 for purchase and $27,616 for refinancing.

“The Mortgage Rate Competition Index is the widest it has been in five years,” said Tendayi Kapfidze, Chief Economist at LendingTree. “The inaugural release comes at an important time for mortgage borrowers as interest rates have been on an upward trajectory in 2018, increasing the price of buying money on a daily, if not hourly basis. As rates change, some lenders react more than others, resulting in interest rate variances. Borrowers have the opportunity to compare offers from different lenders, and find the best offer that fits their needs.”
To view the Mortgage Savings Tracker and Mortgage Rate Competition Index, visit  https://www.lendingtree.com/home/mortgage/rates/mortgage-rate-competition-index/.
To view the white paper on the Mortgage Rate Competition Index, visit  https://www.lendingtree.com/content/uploads/2018/03/The-LendingTree-Mortgage-Rate-Competition-Index.pdf
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings.  LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.