What Decides Mortgage Rate?

The mortgage rate is the rate at which the banks are willing to lend money to you to buy a house or other types of property. The rate is determined in part by the repo rate that the reserve bank is lending money to the banks. That is not the only factor that determines the mortgage rate though. There are other factors involved and some of these factors are within your control.

That is why it's significant to shop around for your mortgage to acquire the best possible mortgage rate for you. But do not be fooled by a really low mortgage rate. Some banks offer really a really low mortgage rate but then charge service fees that are way above other banks which means in the long run that your mortgage may cost you far more.

There are also many credit report companies who could assist you with your credit score. It is significant to have the best credit score possible, as your credit score also in part determines the mortgage rate the bank would offer you. A good credit score means a better rate. It could also mean lower deposits and lower insurance premium rates, so check out your credit score and try to improve it as much as possible

There are a lot of mortgage companies out there. This is good for you because they are all competing for your business and in order to compete they frequently offer a competitive mortgages.

And do not just take the first loan offered to you, unless its the best of course! check out if you could negotiate. Remember each percentage point on your mortgage rate, translates to thousands of dollars saved in the long run.

Finally, research the different loans available at different mortgage rates. There is a best type of loan for you and again, by applying for the right kind of loan, acquiring the best mortgage, you would or could save thousands which could be used for other things - like college, retirement or holidays...

The extra effort you put into checking the right loan at the best mortgage rate is well worth it in the long run.

But whether you are looking for a fixed or variable mortgage rate loan, be sure to shop around for the cheapest mortgage rate.