Almost every homebuyer in America paid more on their mortgage than they needed to in 2025. And depending on your zip code, those overpayments can range from annoying to a six-digit mistake.
That’s the headline from Bankrate’s new analysis of 3.2 million mortgage originations under the Mortgage Disclosure Act, which the company compared to binding competitive offers in its mortgage market across more than 350 metropolitan areas.
The most important numbers are that 87 percent of homebuyers in 2025 will not secure the lowest interest rate available, and the typical borrower will overpay by about $3,343 per year, or an estimated $78,186 over the life of the loan.
Gaps are not evenly distributed. Bankrate’s model controlled for 17 variables, including credit scores, loan programs, down payment sizes, and even borrower demographics, and found that the widest spreads were concentrated in areas with a mix of unexpected small markets and familiar high-cost coastal metros.
Small market, big spread
Victoria, Texas and Tyler, Texas have the highest interest rate spreads in the country at 1.24 percentage points and 1.19 percentage points, respectively, above the most competitive offers available in each market. This difference equates to an average annual overpayment of $2,841 in Victoria and an average annual overpayment of $3,361 in Tyler, or lifetime overpayments of $63,038 and $76,528.
Los Angeles-Long Beach-Anaheim ranks third, with a spread of 1.18 points and a lifetime overpayment of $149,073, given the high market loan balance. This was by far the largest dollar amount on Bankrate’s top 10 list.
Santa Fe, New Mexico. Santa Rosa Petaluma, California. Corvallis, Oregon. Santa Cruz-Watsonville, Calif., rounds out a list dominated by high-priced metros in the West, with lifetime overpayments exceeding $100,000.
Elkhart-Goshen, Indiana, and La Crosse-Onalaska, which straddles Wisconsin and Minnesota, were outliers. These are small metropolitan cities in the Midwest where home prices are relatively low, but interest rate spreads exceed 1.14 percentage points, and lifetime overpayments exceed $61,000 anyway.
Even the “best” market costs buyers thousands of dollars.
The cities closest to the highest interest rates available to borrowers were not concentrated in a single region, but were skewed toward the Midwest and Southeast.
Nationally, Rocky Mount, North Carolina, had the smallest gap at 0.65 percentage points. Still, it was enough to cost the average borrower $2,108 a year. Lakeland-Winter Haven, Florida, and three Iowa metros (Dubuque, Waterloo-Cedar Falls, and Cedar Rapids) completed the rest of the top five.
The important thing, Bankrate said, is that there is no market in the country where shopping doesn’t pay off.
“Borrowers almost everywhere in the country are overpaying on their mortgages, but exactly by how much depends largely on their zip code,” Bankrate data analyst Alex Gailey said in the report. “Expensive coastal metros have the highest total overpayments. But this isn’t just a problem in big cities. No matter where you live, comparison shopping has the power to stop you from overpaying.”
Opportunity to introduce low lift
For real estate agents working with buyers, this data adds concrete numbers to conversations that often remain abstract. That’s the cost of not using a shopping loan.
Bankrate’s recommendation to get at least three quotes from different lenders on the same day is a low-lift introductory opportunity for agents who want to establish themselves as advocates beyond the transaction itself.
This is especially true in markets like Victoria, Texas. Tyler, Texas. And California’s Santa Fe-Santa Cruz corridor and the Mountain West are at the highest risk, the report shows.
The report also arrives at a time when online marketplaces and price comparison tools have made price shopping more visible to consumers, making the persistence of the 87% overpayment rate notable. It is clear that access to comparison tools does not lead to comparison shopping.
Bankrate’s model utilizes HMDA’s loan-level data, the Federal Reserve’s Consumer Finance Survey, and Freddie Mac and Ginnie Mae’s loan-level disclosures overlaid with proprietary market prices.
While this is a wider datanet than most single-source interest rate research, the benchmark itself is still proprietary to Bankrate, a detail worth alerting readers to before the six-digit lifetime number is repeated uncritically.
Still, the core findings are consistent with what economists have long said about mortgage purchases. That means most borrowers often get a single quote from someone who originated or referred a previous loan and never test that number against the market.
“The best thing to do is break out of the single quote loop,” Gary says. “Rather than simply checking with your bank or following a quick recommendation, get multiple quotes from different financial institutions. Such head-to-head comparisons can help ensure you get the best mortgage rate and, according to our research, can save you an average of more than $3,300 a year.”
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