Report: Mortgage Rate Comparison for Different Credit Score Ranges [Charted]
By Elizabeth Stewart @ Real Estate Daily
January 11, 2018

Most buyers do not have perfect credits scores and cannot make a full 20% down payment. Unfortunately, borrowers with lower credit scores are consistently quoted much higher rates, resulting in a 75 basis point gap in borrowers’ average quoted annual percentage rate (APR).

Key Takeaways

  • Average APR for borrowers with 760+ credit scores was 4.26%
  • APR for borrowers with scores between 680 and 719 was 4.56%
  • APR for borrowers with scores between 620 and 639 was 5.01%
  • Average down payment for borrowers with lower credit scores is significantly lower

Brief

“Most quoted industry rates are for a hypothetical borrower with prime credit who makes a 20% down payment,” according to a new study from LendingTree. “Most borrowers do not fit this profile. Our report includes the average quoted APR by credit score, together with the average down payment and other metrics.”

The report showed significant differences between APRs for ideal buyers and those with lower credit scores. The difference between consumers with top credit scores (760+) and those with the lowest credit scores (between 620 and 639) was a whopping 75 basis point difference. Consumers with mid-range credit scores (between 680 and 719) were quoted APRs with an average difference of 30 basis points.

Report: Mortgage Rate Comparison for Different Credit Score Ranges

Borrowers with lower credit scores also made significantly lower down payments. Consumers with top credit scores put down $82,314 (32.6%) on an average loan amount of $252,033. Consumers with mid-tier scores only put down $43,604 (20.1%) on an average loan amount of $216,985.

Report: Mortgage Rate Comparison Across Different Credit Score Ranges