Purchasing a home is likely the most significant investment you will ever make. Most Canadians will take out a mortgage to cover the majority of the cost. They will likely also pay a lot of interest throughout the term of the loan.
The interest rate on a mortgage is referred to as the mortgage rate. While banking institutions and other mortgage companies may promote a certain percentage, the actual rate is determined by various factors, including the borrower’s credit history. Fixed and variable mortgage rates are the two most common types.
Minor adjustments in mortgage interest rates can significantly impact the amount of money you pay for your mortgage. Knowing what factors influence your mortgage interest rate is essential, even if you currently own a home. Read on to understand the best ways to monitor mortgage rates today so you can plan better for your future.
The State of the Economy – in Canada and Elsewhere
Banks’ funds are provided by depositors and investors in Canada and other countries. Consequently, interest rates in these areas play a significant role in funding costs. And these prices fluctuate for numerous reasons.
Many major Canadian banks take out loans from other nations, especially the United States. Also, consider that the financial markets around the world are interconnected. Events influence interest rates in Canada and in other countries.
The Bank of Canada Forecast
Interest rates are also influenced by the Bank of Canada, primarily through adjustments in their policy interest rate. It is crucial to stay updated with the Bank of Canada forecasts to understand better where the economy is headed.
Starting in the spring of this year, the Bank of Canada, like many other central banks around the globe, has been increasing interest rates, primarily to combat out-of-control inflation. Since we appear to be in the midst of a rate-hiking cycle, at least for the time being, there is a greater focus on how many times the rate will be hiked this year.
Personal Financial Habits
The number of risks lenders take when lending to you is determined by your credit history and several options you select for your mortgage. A higher interest rate almost always equates to a more considerable risk for the lender.
Therefore, you need to establish good personal financial habits to guarantee a lower interest rate. For example, a high credit score might assist in alleviating your lender’s fear by demonstrating to the lender that you have been responsible for repaying your debts. As a result, you may be eligible for a cheaper interest rate than people with a lower credit score.
The Right Mortgage Broker
Mortgage brokers can be extremely helpful if you find all these financial responsibilities somewhat overwhelming to fully comprehend. Finding the right broker can help you navigate and obtain a mortgage with minimal stress and worry.
Their services aid you in completing the mortgage pre-approval and application process by providing guidance and clarification. They will also enter negotiations with mortgage lenders on your behalf to secure the lowest mortgage rates and terms. The right mortgage broker can also help you acquire a mortgage tailored to your specific financial situation.
Call Us for Mortgage Advice Today!
With 40 years of experience, our highly professional team at Axiom Mortgage Solutions is very well-versed in navigating bank mortgage rates. Please call our Tecumseh, Ontario office at 519-735-1440 or our Leamington, Ontario office at 519-326-4978 to talk with a member of our team. If email is your preferred way to communicate, you can use our online contact form to reach us.