Mortgage rate is the interest rate on a mortgage loan. Since a mortgage is typically taken for a long term period, ranging from 15 to 30 years, borrowers, not only in Thornhill but in other places as well, are frantically on the look out for a low mortgage rate. Believe it or not, even a one percent cut on the interest rate could save you thousands of dollars over the mortgage term.

Mortgage lenders in Thornhill will offer you a mortgage rate on the basis of your financial position and particular case. Though the market seems flooded with claims of low mortgage rates advertised by various financial companies, in reality, they are not all that easy to obtain. A low mortgage rate almost seems preordained by a number of factors such as credit score, timing, mortgage term, etc. These are discussed in detail below:

1. Timing

During economic meltdown, national banks, followed by other banks and financial institutions, will lower their interest rate in order to facilitate borrowing and increase economic activities. In such times, borrowing money becomes cheap and a prospective borrower will benefit from low mortgage rates. Such times are inherently the best times to borrow and invest in real estate.

2. Credit Report

Your credit history and credit scores are the principal factors to decide what mortgage rate you are entitled to. People with high credit rating are considered to be low risks and vice versa. Naturally, a lender will be averse to forwarding a traditional mortgage to a high risk borrower, and will take necessary steps to cover self-position, by raising the interest quotient. Thus, the higher your credit score and rating, the lesser will be your interest rate. For that reason, it is advisable to take the necessary steps to improve your credit ranking before applying for a mortgage. However, fixed rate mortgage commands a higher interest rate as a premium for stability.

3. Down payment

Another way to attract low mortgage rates would be to make a larger upfront payment. This reflects a good financial position on your behalf, and reduces the risk a lender faces. Though the market seems flooded with claims of low mortgage rates advertised by various financial companies, in reality, they are not all that easy to obtain.

4. Mortgage type

A variable interest rate provides lower rates in the short-term. However, they come with an inherent risk factor and are susceptible to steep fluctuations based on market movements in the long run. In such times, a fixed rate mortgage puts out as a safer bet as it is immune to market ripples. However, fixed rate mortgage commands a higher interest rate as a premium for stability.

5. Mortgage term
A shorter mortgage term poses less risk to the lender. Further, you save on the interest payment by not requiring to pay the loan for a long time.

For more information, you may contact:
Allegro Mortgages Corp. – Best Broker for All Your Financing Requirements
(416) 987-0008

Check out amortgages.ca for information on different refinancing options.

Author Bio: Please visit the website Amortgages.ca if you are interested to learn more about the best mortgage rate Thornhill. The website also provides information on mortgages Maple and mortgages Woodbridge.

Category: Finances
Keywords: best mortgage rate, mortgage, mortgage broker, mortgages in Toronto, mortgages in Ontario, mortgage