What Factors Can Impact Your Mortgage Rate?

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What Factors Can Impact Your Mortgage Rate?
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• As one of the most significant purchases most of
  us will make in our lifetime, a mortgage is a big
  deal, and as such, it can help to save money on
  it wherever, and whenever you can. Even the
  smallest of changes in an interest rate can make
  a big difference to the amount you have to pay on
  your mortgage, making understanding the factors
  that can impact these rates, very important.
• Lets look a little more closely at what factors
  can impact mortgage rates
• Economic factors, both in Canada and globally
• Whether at home here in Canada, or elsewhere in
  the world, the money coming from depositors and
  investors that banks lend out, means the cost of
  funding is predominantly driven by the interest
  rates in these places, and these rates can vary
  hugely.

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• Strong economic growth fueling demand for money
• Higher interest rates are typically a result of
  strong economic growth, while lower rates are
  consistent with economic growth being weaker. To
  explain this further strong economies make
  businesses want to borrow money from their
  investors to expand their companies, meaning that
  a mortgage provider must pay a higher rate of
  interest to encourage investors to lend it to
  them. The opposite occurs when an economy is weak.

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• Strong economic growth fueling demand for money
• Higher interest rates are typically a result of
  strong economic growth, while lower rates are
  consistent with economic growth being weaker. To
  explain this further strong economies make
  businesses want to borrow money from their
  investors to expand their companies, meaning that
  a mortgage provider must pay a higher rate of
  interest to encourage investors to lend it to
  them. The opposite occurs when an economy is weak.

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• Global economy as a whole
• With a lot of banks in Canada borrowing money
  from other countries such as the US, it pays to
  remember that the financial markets of the world
  are all connected, and that rates of interest in
  Canada typically respond to what might be
  happening elsewhere in the world.
• Influences from The Bank of Canada
• Changes to The Bank of Canadas policy interest
  rate can have a significant impact upon mortgage
  interest rates, and when the economy is strong,
  they may elevate the rate to prevent inflation
  from soaring above their target. In much the same
  way, when the economy is weak, they might choose
  to lower their policy rate to stop inflation from
  dipping below the target.

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• Where short-term interest rates are concerned,
  changes made by The Bank of Canada to their
  policy interest rate can lead to similar changes,
  including the prime rate used by banks to help
  provide a basis for the price of variable-rate
  mortgages.
• A change to policy rates can also have an impact
  upon long-term interest rates, particularly if
  the change is not expected to be long-lasting.
• Your particular mortgage and its characteristics
• Some of the features you choose for your
  mortgage, along with your past credit history,
  can influence how much of a risk, lenders deem
  you to be the higher the risk, the higher the
  interest rate.

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• Risk of non-repayment
• Lenders are primarily most concerned as to
  whether youll be able to repay the loan, and a
  high credit score can help strengthen your case
  and mean that you pay a lower rate of interest
  than someone else with a lower score.
• Interest rate risk
• While typically renegotiated every five years,
  Canadian mortgage loans can be renegotiated as
  often as every six months, and the more often
  this is done, the higher the risk of the rate
  being different to the previous one.

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• Risk associated with prepayment
• Lenders are unable to profit as much from the
  funds they raised for your mortgage especially
  if interest rates have fallen since it commenced
  - if you repay it early, something that is known
  as prepayment risk.
• So, what should you take away from all of this?
  Do your research and shop around to make sure
  youre getting the best rates possible! Or
  instead, have a professional mortgage expert do
  it for you.

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• Mortgage-broker-Calgary is your best resource for
  finding a mortgage for your property. Luke Wile,
  is the best calgary mortgage broker and is proud
  to serve clients from across Canada, while being
  centered in Calgary, Alberta. Luke is proud to
  serve his clients with a personalized approach to
  finding his clients the best and lowest Canadian
  interest rates and terms offered by the major
  banks and private lending institutions. If you
  are looking for mortgage broker in Calgary AB,
  with Luke Wile you can get fast and personal
  expertise for your mortgage!