How Much Does a Mortgage Broker Save You?
How much does a mortgage broker save you? On average $10,662 over the life of the loan compared with a nonbank retail lender, according to a 2024 analysis of 2023 federal mortgage data.
A Polygon Research study of 2023 HMDA records found borrowers saved an average of $10,662 over the life of the loan using an independent mortgage broker instead of a nonbank retail lender, and $13,432 on VA loans. The study was supported by United Wholesale Mortgage. Independent Freddie Mac research values comparing lenders at $1,500 to $6,000.
| Question | Answer |
|---|---|
| Average saving | $10,662 over the life of the loan |
| Compared against | Nonbank retail lenders, not banks |
| Source | Polygon Research, 2023 HMDA data |
| Funded by | United Wholesale Mortgage and Willow Canyon Advisors |
| VA loans | $13,432 average saving |
| Independent figure | Freddie Mac: $1,500 to $6,000 from comparing quotes |
By Julia LuisMortgage Loan Officer · Mortgage-World.comThe source
Where the Number Comes From
Polygon Research analysed 2023 Home Mortgage Disclosure Act records along with agency performance and mortgage-backed securities data. That is public, loan-level data covering millions of mortgages, not a customer survey.
Two caveats belong with the figure. The study was supported by United Wholesale Mortgage, whose business is the broker channel, and the comparison is against nonbank retail lenders rather than your local bank. The same research produced a more conservative estimate of roughly $3,500 per loan using a fee-based method.
For an independent view, Freddie Mac found that one extra rate quote saves about $1,500 over the life of a loan, and five quotes roughly $3,000. Smaller numbers, same direction.
The reason
Why a Mortgage Broker Saves You Money
Retail pricing has to cover branches, advertising and salaried loan officers. Wholesale lenders sell through brokers and carry none of that, so their published pricing starts lower.
Then competition does the rest. A retail loan officer works from one rate sheet. A broker sends one application to several wholesale lenders and the best price wins the file.
Purchase loans in 2023: borrowers using a broker paid less up front and got a slightly lower rate.
Your file
What You Would Actually Save
An average is a signal, not a forecast. Four things move your number.
- Loan size. The same rate advantage is worth about twice as much on $600,000 as on $300,000.
- How long you keep the loan. Sell in three years and you capture a fraction of a life-of-loan figure.
- How unusual your file is. A 780 score with 20% down prices well anywhere. Self-employed, investor and credit-event files are where the gap widens.
- The market. Lender pricing spreads out when rates move, which is when shopping pays most.
Banks do win sometimes. Relationship pricing on a large deposit balance, or a portfolio loan the bank keeps on its own books, can beat anything wholesale offers. Ask yours directly, because it is rarely volunteered.
Check it yourself
Check How Much a Broker Saves You
Get two or three Loan Estimates on the same day, with the same loan amount, credit score, down payment and term. Pricing moves during the day, so quotes taken a week apart tell you nothing.
Compare section A, the cash to close on page one, and the APR. Not the advertised rate, which assumes a borrower with perfect credit and 20% down. The CFPB publishes an annotated Loan Estimate that walks through every box.
Shopping costs almost nothing. Mortgage inquiries inside a 14 to 45 day window count as one event for credit scoring, which exists specifically so comparing lenders is not penalised.
- $10,662 average saving over the life of the loan, from 2023 HMDA data.
- The comparison is against nonbank retail lenders, and the study was lender-funded.
- 2023 purchase loans: 115 bps upfront at 6.58% via broker, 148 bps at 6.60% via retail.
- Savings grow with loan size, how long you keep the loan, and how complex your file is.
- Compare section A, cash to close and APR on estimates pulled the same day.
Common questions
Common Questions
Do mortgage brokers really save you money?
On average, yes. Polygon Research’s analysis of 2023 HMDA data put the difference at $10,662 over the life of the loan versus nonbank retail lenders. Freddie Mac’s independent research, measuring the effect of comparing quotes rather than of using a broker, found $1,500 to $6,000.
Do brokers charge fees that cancel out the saving?
Broker compensation is disclosed in section A of your Loan Estimate, and in most transactions the lender pays it rather than you. In 2023, broker-originated purchase loans carried lower upfront costs than retail: 115 basis points against 148.
Keep reading
Related from Mortgage-World.com
See the difference on your own loan
Send us the Loan Estimate you already have. A licensed loan officer will price the same loan through our wholesale lenders on the same form. If we cannot beat it, we will say so.
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