Okay, it sounds a little silly, but it’s not a bad deal if you happen to have a million dollars lying around the house.
CitiMortgage has so-called “relationship pricing” that affords its customers certain discounts on home loans they take out with the bank, which I know a lot of other banks offer as well.
They just seem to be upping the ante when it comes to the discount, going beyond the boring old .125% off your mortgage rate.
CitiMortgage Offers Tiered Rate Discounts Depending on What You Deposit
As you can see from this handy chart, even if you deposit just one dollar, you can get $250 off your closing costs when taking out a home loan with Citi.
These tiers are available to both new and existing Citi customers, so if you already meet requirements, it’s a no-brainer to at least consider them when looking for a mortgage.
The caveat with any of these discounts is that you must agree to have the money automatically transferred from your Citi checking or savings account each month to make your mortgage payments.
Banks favor autopay when it comes to receiving mortgage payments because there’s probably some data point out there that says it lowers default rates.
It’s unclear how long the money actually has to remain with Citi once your mortgage is funded. They certainly wouldn’t require it to be there for a full 30 years…
Anyway, if you’re able to muster a deposit of $50,000 or more, you can snag a more substantial .125% off your mortgage rate.
So instead of a mortgage rate of say 4.5% on your 30-year fixed mortgage, you might be able to get a rate of 4.375% instead. Not a bad deal if you’re already a Citi banking customer, assuming they offer competitive rates relative to other lenders.
But the real savings start once you’re able to come to the table with $200,000 or more. At that level, you’ll get a very attractive .375% off your mortgage rate, which will likely make Citi one of the best options around, if not the best.
That could push your interest rate down to 4.125% from 4.5%, assuming it was around that level to begin with.
You Might Be Able to Get That 3% 30-Year Fixed Mortgage You Wanted
- While the lowest mortgage rates seem to have up and left
- This could be one workaround to get a better rate on your mortgage
- Just be sure to do the math on what your money will earn with Citi
- Relative to other investing options out there
Why stop at $200,000 though? If you can come up with another $800,000, you get a full .50% rate discount, potentially enough to get that 3% 30-year fixed mortgage rate you always dreamt of.
Of course, if you have $1 million to spare, one might question why you’d take out a mortgage to begin with. But as I’ve mentioned many times before, the ultra-wealthy are fans of home loans because it’s cheap money relative to what they might earn elsewhere.
This explains why Mark Zuckerberg has/had a mortgage, and why financial guru Warren Buffett took out a 30-year fixed on his beach house in the 1970s.
For the record, Citi also tends to offer bonuses for opening bank accounts, so you might be able to double-dip here and get two bonuses if you open a new bank account and take out a mortgage with the company.
All sarcasm aside, if you’re able to come up with money at the more reasonable tiers, it could make sense to take a look at Citi along with other lenders during your home loan search.
It’s nice to see lenders offering discounts since they aren’t all that common outside of Chase’s recent mortgage promotion, but never choose a lender simply because of one. Just use it as a tiebreaker if it comes down to that.