Is State Farm Bank An Expensive Mortgage Lender?

We compare mortgage interest rate and loan related closing costs at State Farm Bank with other lenders for mortgages with similar borrower characteristics:

Interest Rate: lower than average (-0.05%)
Loan Related Closing Costs: similar to average (-$144)
Assessment: this lender tends to be a cheap lender.

This scoreboard is based on data reported to FFIEC. In the data, State Farm Bank originated 7034 mortgages, a national market share of 0.1%. It was most active in AK (0.4% market share), AR (0.3% market share), and WY (0.3% market share).

On average, State Farm Bank’s interest rates were lower than those of comparable mortgages at other lenders (-0.05%).1The comparable mortgages control for State Farm Bank’s distribution of loan term (e.g. 30 year vs 15 year), loan-to-value (LTV), debt-to-income (DTI), loan amount, loan program (e.g. Conforming/FHA), loan purpose (e.g. purchase/refinance), and county. Interest rate and loan related closing costs are estimated based on fixed rate mortgages only, whereas market shares include all purchase or refinance mortgages. Its average total loan related closing cost was $3356, which was similar to those of comparable mortgages at $3500, with a difference of -$144. Overall, we estimate that State Farm Bank tends to be an cheap lender, with a cost-adjusted-rate difference of -0.07% compared to comparable mortgages at other lenders.2Cost adjusted rates were computed based on each percent of the loan amount in loan related closing costs being worth 1/6 of a percentage point in interest rate. Nevertheless, we recommend comparing your rate and fees with at least a few other lenders before signing with State Farm Bank.

State Farm Bank originated Conforming and Jumbo mortgages for new home purchases. It also originated Conforming and Jumbo mortgages for refinances. We breakdown its interest rate and total loan related closing cost on by each of the mortgage types it originated below:

Home Purchase Mortgages from State Farm Bank compared to other lenders

Conforming Jumbo
Interest Rate Difference -0.05% -0.24%
Loan related Closing Cost Difference -$35 -$454
Cost Adjusted Rate Difference -0.06% -0.25%

Based on the table above, State Farm Bank is cheap for Conforming and Jumbo purchase mortgages.

Mortgage Refinancing from State Farm Bank compared to other lenders

Conforming Jumbo
Interest Rate Difference -0.03% -0.16%
Loan Related Closing Cost Difference -$216 -$989
Cost Adjusted Rate Difference -0.06% -0.19%

Based on the table above, State Farm Bank is cheap for Conforming and Jumbo mortgage refinance.

Other information about State Farm Bank:

Regulator: Consumer Financial Protection Bureau (CFPB) 
Top holder: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Registered city and state: Bloomington, IL, 61710
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Footnotes   [ + ]

1. The comparable mortgages control for State Farm Bank’s distribution of loan term (e.g. 30 year vs 15 year), loan-to-value (LTV), debt-to-income (DTI), loan amount, loan program (e.g. Conforming/FHA), loan purpose (e.g. purchase/refinance), and county. Interest rate and loan related closing costs are estimated based on fixed rate mortgages only, whereas market shares include all purchase or refinance mortgages.
2. Cost adjusted rates were computed based on each percent of the loan amount in loan related closing costs being worth 1/6 of a percentage point in interest rate.