American homebuyers and homeowners paid tens of billions of dollars last year in avoidable mortgage costs by not shopping around, according to research by a mortgage auction company.
Borrowers who have taken out mortgages since 2022 are collectively paying an estimated $65 billion a year in avoidable costs, according to a report published Friday by consumer financial company Bankrate.
Bankrate analyzed 3.2 million mortgage originations tracked in federal housing data and compared them with offers available through its digital loan marketplace. It found that 87 percent of borrowers likely overpay for their mortgages.
For loans originated in 2025 alone, that translated into roughly $11 billion in excess annual payments and about $247 billion over the life of those loans.
More than 90 percent of purchase borrowers likely overpaid, while refinance borrowers, despite typically having more time to shop around, still overpaid 79 percent of the time.
The report also found that borrowers with higher incomes, stronger credit profiles, and lower debt burdens were often among those paying the steepest price.
Bankrate said highly qualified borrowers may be more likely to overpay because they face less anxiety about being approved and therefore have less incentive to compare offers. Borrowers with the lowest debt burdens relative to their incomes also had some of the highest overpayment rates.
By contrast, financially stretched buyers closer to their lending limits tended to secure better overall pricing, largely because financial necessity pushed them to shop more aggressively, the report found.
Age also played a role, particularly in the refinance market. In the purchase market, every age group overpaid at roughly the same rate. But among refinance borrowers, those under 35 faced a lifetime “tax” equal to 14 percent of the refinanced loan balance. That burden increased steadily with age, reaching 20 percent for borrowers aged 55 to 64.
The study called for two market-based policy responses: requiring lenders to disclose a benchmark rate for similarly qualified borrowers alongside any mortgage offer, and creating a voluntary certification framework for lenders that compete in transparent multi-lender marketplaces.
“Our research suggests that for most borrowers, competitive rates exist; borrowers just never see them,” said Bankrate CEO Matt Fellowes, the report’s primary author. “When lenders compete for a borrower’s business, the savings are meaningful and immediate: $279 a month on average, an amount that puts homeownership out of reach for many borrowers.”
