Bank Rate Discount vs Advisor Return Gap: What Actually Costs More?
A bank may shave 0.25–0.50% off your mortgage when your portfolio sits with their advisor. But if their advisor returns trail an independent advisor by 1–2% a year, the gap on a large portfolio can dwarf the rate savings. This calculator runs both sides.
Zack Cervantes · NMLS #502342 · New American Funding
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Are you buying or refinancing?
Mortgage
Effective rate if portfolio parks at the bank: 5.500%
Portfolio
One-Time Transfer Friction
Results
Return gap dwarfs the rate discount
The advisor return gap costs 26x more per year than the rate discount saves. Parking the portfolio at the bank for the rate is a losing trade.
Mortgage Savings
$3,811/yr
$318/mo
Advisor Return Gap
$100,000/yr
2.00% spread on portfolio
Net Annual (yr 2+)
-$96,189/yr
Net First Year
-$132,802
includes transfer friction
Break-Even Portfolio
Below $190,569, the rate discount wins. Above it, the return gap costs more than the rate saves.
How the math works
Rate discount × loan balance = annual mortgage savings (recurring). Return spread × portfolio = annual cost of leaving assets with the bank advisor (recurring). Transfer fee and weeks out of market apply once if you do move.
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