When you’re shopping for a mortgage, even a small reduction in your interest rate can make a noticeable difference over the life of your loan. If you already have substantial savings or investments with your bank, you may qualify for relationship pricing, a benefit that rewards existing customers with lower mortgage rates.
Understanding how relationship pricing works can help you maximize your savings, whether you’re buying a new home or refinancing an existing mortgage.
What Is Mortgage Relationship Pricing?
Mortgage relationship pricing is a program offered by some lenders that provides discounted mortgage interest rates to customers who maintain qualifying deposit or investment accounts with the same financial institution.
Instead of offering the same rate to every borrower, lenders may reduce your interest rate based on the value of your banking and investment relationship. The larger your qualifying assets, the greater the potential discount on your mortgage.
How Does It Work?
Relationship pricing is generally based on the amount of eligible assets you have with the lender prior to your mortgage closing. These assets may include checking accounts, savings accounts, or professionally managed investment accounts.
Some lenders also offer additional savings if you enroll in automatic mortgage payments and electronic statements. These features not only simplify your monthly payments but may also help reduce your interest rate even further.
Who Can Benefit?
Relationship pricing can be especially valuable for:
- Homebuyers purchasing a primary or second home
- Borrowers refinancing an existing mortgage
- Individuals with significant savings or investment portfolios
- Clients who already bank with the mortgage lender
If you’re already working with a financial institution that offers relationship pricing, it’s worth asking whether your current assets could help lower your mortgage rate.
Can You Still Qualify After Closing?
In some cases, borrowers who move qualifying assets to the lender shortly after closing may still be eligible for a one-time interest rate adjustment. While eligibility requirements vary by lender, this option can be beneficial if you’re planning to consolidate your banking or investment accounts after purchasing your home.
It’s important to discuss these opportunities with your mortgage professional before or shortly after closing to understand the available options and deadlines.
Things to Keep in Mind
While relationship pricing can provide meaningful savings, there are a few important considerations:
- Not every mortgage program qualifies for relationship pricing.
- Assets used to qualify for the discount may not be eligible to cover your down payment or closing costs.
- Eligibility requirements and discount amounts vary by lender.
- You’ll still need to meet all credit, income, and underwriting guidelines to qualify for the mortgage.
Reviewing the program details with your loan officer can help you determine whether relationship pricing is the right fit for your financial situation.
Explore Your Mortgage Savings
Looking to buy a home or refinance in the United States? You may qualify for mortgage savings through relationship pricing and other available programs. Call 201-745-3426 or email shaleenmahtani@gmail.com to discuss your options with an experienced mortgage professional.