Different ways you can lower your mortgage rate
A mortgage rate is the interest rate you’ll pay on a loan to buy a house or refinance an existing one. The rate is determined by a number of factors, including the current market conditions and the riskiness of the loan. But one thing most people don’t think about is how their mortgage rate affects them.
With a little research and some strategic planning, you can substantially lower your interest rate and save tens of thousands of dollars over the life of the loan. The key is to find the right mortgage rate for your situation. Keep reading to learn about six ways you can lower rbc mortgage rates calgary.
1. Get the best mortgage rate available.
The first step is to get the best mortgage rate you can. It’s important to understand how interest rates work before applying for a loan or refinancing your existing one. Interest rates are tied to a lot of factors, including market conditions, credit score, and loan amount. If you have good credit and a large loan amount, your rate will be higher than if you have poor credit and borrow a small amount on a short-term fixer-upper.
2. Shop around for different types of loans.
One way to save money is to shop around for different types of loans—fixed-rate mortgages versus variable-rate mortgages (vars) and term loans versus balloon loans—to see what works best for your situation. For example, a fixed-rate mortgage works best if you plan to stay in your home for the long term. A variable-rate mortgage works best when you want to sell your home and move on.
3. Shop around for different loan terms.
When looking at different loans, consider the term. For example, if you plan to stay in your home for the long term, a 30-year fixed-rate mortgage is typically a good choice because it will save you money over time. If you know that your home value will increase over time and you don’t plan on staying in your home for 30 years (or even 10 or 15 years), then a shorter-term mortgage may be more cost-effective in the long run because it will have lower monthly payments over time because interest rates are typically lower than they are on longer-term loans.