Buying a house is already the biggest investment most people make in their lifetime – so if you can shave off costs by getting the best mortgage interest rate, all the better!The mortgage market is a confusing one at the best of times. It can be hard to sift through the large number of providers, let alone compare all their different bewildering types of offer. The details of who offers the best rate tends to change a lot, sometimes even on a daily basis.To help you navigate this maze, we have pulled together a simple guide to finding who has the best mortgage interest rates.
Better Rates Are Usually Shorter Mortgages
You wouldn’t tie yourself down financially for decades in most situations – and it’s not a good idea to do it for a mortgage, either.A lot of homebuyers make the mistake of going for a fixed rate mortgage over the longest term possible, for example thirty years. They think that by spreading the payment, the monthly rates are lower so the repayments become more affordable. It may be true that spacing out payment makes each payment more affordable, but in fact this approach with an interest rate locked in for the whole term means your effective interest rate for the mortgage will be higher. It’s less costly to get a shorter term mortgage. A variable rate will often be better than a fixed rate, even though fixed rates can give you a sense of security in the event that interest rates go sharply upwards in the future.
Go Beyond The Headlines
Big banks got big by making lots of money – which often means they charged their customers a lot of money!That sounds like a simple logic, but in rushing to well-known or widely advertised banking and mortgage brands, many people are making a costly mistake. The best rates are often offered by leanly run operations who do not spend lavishly on advertising but do have a deep understanding of a specific market. That can reduce their delinquency rate, which helps them keep rates as low as possible. These types of institutions may be local or community banks, savings and loans, some types of credit union and other mutually owned community-based lenders.The best mortgage interest rates are often just a few blocks down your neighbourhood main street – and compared to large, faceless banks, you can speak to staff much more easily to find out what is best for you.
Every Day Is Different
Interest rates really can change on a day to day basis – so the best interest rate today is exactly that!When comparing rates from different lenders, bear this in mind and make sure that you are doing a fair comparison. Get quotations on the same day, so that you are getting the best interest rates on the same day and can make an informed judgment.
The Interest Rate Is Only Part Of The Cost
When you look at the best interest rate, be sure to look at the whole picture.Typically what you pay for a mortgage will involve multiple elements. You’ll make capital repayments and pay interest, but there will usually also be fees such as the fees for arranging the mortgage – and these can be very substantial.Lenders know that many borrowers focus on the interest rate as the way of assessing whether a mortgage offers good value. So, when comparing mortgages, you should not look at the interest rate in isolation. Rather, you need to consider the interest rate along with other costs to know whether the rate really is compelling, or if it’s just been reduced by shifting some of the interest costs through disguising them as outsize fees.Owning your own home is a dream for most people and mortgage financing helps you achieve that dream. Mortgages are expensive, which is why many lenders complicate the market and hope you won’t look beneath the hood of their numbers too much to see what you will really end up paying. But with a few financially savvy approaches, you will be well placed to find out who has the best mortgage interest rates today. Why not have a quick search now and see what you find?