Since 2022, U.s. Borrower Have Lost a Collective $65 Billion a Year in Mortgage Overpayments

S. borrower have lost a collective $65 billion a year in mortgage overpayments. Most U.S. homeowners are likely overpaying for their mortgages, according to a recent study by Bankrate that found a majority of borrowers are paying about $3,300 more per year than they should. About 87 percent of homebuyers do not get the lowest mortgage rate available to them when they purchase their home, simply because they do not shop around and lenders have no interest in directing them elsewhere.

Bankrate, a personal finance website, reached that number by comparing 3.2 million 2025 mortgage originations against rates from its own marketplace. It calculated that, across all mortgages originated since 2022, those homebuyers lost a collective $65 billion a year in mortgage overpayments. This "hidden" homeownership financial burden costs the typical U.S. borrower $78,186 in extra interest and fees over a 30-year loan, Bankrate calculated.

"The dream of homeownership feels increasingly out of reach for millions of Americans, so it's worth asking whether the problem is the market or the process, Bankrate CEO Matt Fellowes, the primary author of the study, said in a statement. "Our research suggests that for most borrowers, competitive rates exist; borrowers just never see them. 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.

How much homeowners overpay in mortgages depends heavily on where in the country they are located, according to Bankrate's analysis. From Texas to California, borrowers in Western and Southern metropolitan areas lock in mortgage rates well above what they actually qualify for, researchers found. Borrowers in Pennsylvania had the highest rate of overpayment, at 90.2 percent (overpaying by about $3,000 a year), followed by Oregon with 90.1 percent (overpaying by about $4,000 a year).

The lowest overpayment rates were reported in Iowa (83.1 percent, or $2,000 a year), Colorado (83.2 percent, or $4,000 a year), Arizona and South Dakota (each at 84.2 percent, respectively $4,000 and $3,000 a year). However, the highest lifetime tax percentages—overpayment amounts relative to the loan balances—were found to be paid in New Hampshire (23 percent), Illinois (23 percent), New Jersey (22.9 percent) and Florida (22.6 percent). Borrowers were missing the market's most competitive rates by more than 0.8 percentage points on average in a handful of Sun Belt and Midwest metros, Bankrate found, either because they faced less competitive local pricing or they were less likely to shop—or both.

Despite regional and local differences, homeowners all across the country are paying more than they would need to for their mortgages. Though widespread, overpaying for your mortgage is "completely avoidable, according to Bankrate. The most important thing is to check out all your options before settling on one mortgage deal. "People don't seem to understand that there is even an opportunity to shop [around for mortgage rates], Alexei Alexandrov, a mortgage industry researcher and former chief economist of the Federal Housing Finance Agency, told Bankrate.