PHOENIX — A new study by Bankrate finds 9 out of 10 homebuyers did not get the lowest mortgage rate available — and as a result, they are overpaying on their loans.
In Phoenix, data shows 93% of homeowners are overpaying, spending an extra $5,000 a year. Over the life of a loan, that adds up to about $120,000 — or about $400 extra per month that could be going toward necessities like gas or groceries.
Alex Gailey with Bankrate calls it a "hidden homeownership tax" hiding in plain sight.
"The myth that mortgages cost the same at every bank and shopping might not make a difference, and the choice overload when borrowers try to comparison shop. It's very likely borrowers get overwhelmed and give up when they are shopping for a mortgage and take that first referral from a real estate agent or from a friend or family member," Gailey said. "It just tells you, it's a flawed system."
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For homeowners already locked into a mortgage, there may not be much that can be done. But Gailey said homeowners who bought between 2022 and 2024 — when rates were even higher than today — may be able to refinance, and you'll want to shop around for that too.
For those looking to buy, homebuyer education courses are available. Buyers can also connect with a HUD-certified counselor, who will advocate for them. Unlike a loan officer, a HUD-certified counselor does not earn commission on a loan.
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