The popular trading platform Robinhood has teamed up with Sage Home Loans to offer big mortgage rate discounts to its Gold members.
While Robinhood hasn’t entered the loan origination game, they are referring members to Sage and the rate discount appears to be sizable.
However, membership to Robinhood Gold does cost $5 per month (or $50 per year), so there is a cost.
But it comes with a variety of other perks as well, such as 4% APY on uninvested cash. Not too shabby.
Let’s take a look at this new mortgage perk to see if it’s worth exploring.
Robinhood x Sage Home Loans Partnership
If you’re already a Robinhood Gold member, or thinking about becoming one, their latest perk includes discounted mortgage rates with a third-party, unaffiliated mortgage lender called Sage Home Loans.
So first and foremost, Robinhood isn’t making mortgages all of a sudden. They have simply partnered with a mortgage lender to provide a potential benefit to their customers.
And I assume they earn a referral fee of some kind for doing so.
What’s interesting though is you might be able to get a better deal with Sage Home Loans if you’re a Robinhood Gold member as opposed to simply contacting them directly.
On top of that, they also provide a $500 closing cost credit when you use the company to buy a home or refinance an existing property.
Taken together, you could potentially save a good deal of money, assuming the interest rate is also significantly lower than the competition.
Sage cites an example of a $550,000 loan amount at 6.25% versus 7% resulting in savings of more than $100,000 over the loan term.
Just note that the property cannot be located in New York state, nor can it be a mobile home or manufactured housing.
And a minimum FICO score of 580 is required, with loan amounts between $100,000 and $3,000,000 accepted.
Get a 0.75% Mortgage Rate Discount with Sage Home Loans
The discounted mortgage rates with Sage Home Loans are apparently a full 0.75% below the average, as provided by Mortgage News Daily.
I dug into the fine print to see what the loan assumptions were as well. It’s for a primary residence, single-family detached home, with a loan-to-value ratio (LTV) of 75% and no other agency loan-level pricing adjustments (LLPAs).
Basically a vanilla loan scenario for a loan backed by Fannie Mae, Freddie Mac, or the FHA/VA. Nothing too crazy here, though not everyone has 25% down payment.
And that could change things if you’re only able to come up with say 5-10% down.
However, Sage notes that, “In the event that the APR that Sage is pricing for the Baseline Average Loan Scenario is not 0.75% lower than the National Average Mortgage Rate upon its publishing each market day, a pricing reduction is applied by Sage to ensure the APR is at least 0.75% lower that National Average Mortgage Rate (the “Pricing Reduction”).”
The company says all eligible Robinhood Gold subscribers receive the same pricing reduction benefit, even if your individual APR is higher or lower than 0.75% less than the Baseline Average Loan Scenario based on your specific loan scenario.
In addition, the loan pricing includes one discount point paid at closing to get the desired rate, which is reasonable (though not everyone wants to pay any points at closing).
Their sample rate for today is 5.92% versus the 6.67% daily rate compiled by Mortgage News Daily.
That represents a 0.75% discount, as advertised, which is a pretty healthy discount. Just note that MND’s daily rate is a composite rate that is adjusted to account for points.
In other words, MND may display a rate of 6.25% with no points while actual lenders might be quoting 6% or lower with points.
They also throw out loss leaders that are quoting mortgage rates well below the norm in the marketplace.
You Still Need to Shop Around and Compare Outside Lenders
Ultimately, this seems like a pretty sweet deal from Robinhood, especially since the Gold membership is only $5 per month (or even less if paid for annually).
And there isn’t an asset minimum to unlock this mortgage perk.
However, as I say with all these “deals,” you need to compare what they’re offering to that of other lenders.
Sure, Sage might offer a rate 0.75% below MND’s daily rate, but what if another lender offers a rate 1% below MND’s rate?
You’ve got to look at the final numbers to see who is actually lowest, not just the “discount” offered.
It doesn’t really matter what their discount is if another lender can provide a lower mortgage rate with lower fees.
As such, shopping around is imperative, even if you’re a Robinhood Gold member.
Those interested in applying must do so via the “Gold hub” on the Robinhood platform to ensure the proper discount and closing cost credit is applied.
Also note that this new offer is part of a “rolling release” for Robinhood members, so you may not have access to it yet.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.