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In today’s market, securing the lowest mortgage rate is critical in determining the affordability and cost of owning a home. A lower rate means reducing your monthly payments. This can significantly impact your costs and overall financial stability for several years.

Here are five strategies for securing the lowest mortgage rate and getting one step closer to owning your dream home.

Mortgage Rates 101

Especially for first-time home buyers, the world of mortgages and their rates can be unfamiliar territory. The rate of interest charged on your mortgage is contingent on many factors. While rates may advertise a certain percentage, the quote you receive relies on many aspects. For individual rates, your credit, income, and type of mortgage can play a significant role. Also, several facets can impact overall mortgage rates in Canada, such as economic factors.

The primary mortgage types are fixed and variable. A fixed mortgage remains constant for the term length of the mortgage, typically 1-5 years. Your interest and monthly payments don’t change during the term which provides short-term cost certainty for the borrower. A variable rate is tied to a benchmark interest rate and can change, which means your monthly payment and interest can fluctuate. Typically variable rates are below fixed rates but not always and certainly not at the time of writing this blog (March 2023).

There are many considerations for which type of mortgage is for you, and while the rate you receive is contingent on many factors, here are ways to score the lowest.

Improve Your Credit Score to Get the Lowest Mortgage Rate

Your credit score is the utmost important element that lenders consider when determining your mortgage rate. A higher credit score indicates that you can manage debt and risk well. The higher your credit score, the more likely you’ll qualify for the best rates and lowest monthly payments. Beware of “teaser rates” however. Many lenders offer what seems to be the best interest rate, but don’t necessarily provide the lowest total cost. Remember to read the fine print!!!

Obtaining your credit report is the first step to optimizing the ideal target for the mortgage you want. Check any outstanding loans and credit card bills you might have. Consider paying those down consistently and reducing your debt-to-income ratio while avoiding opening new loans and credit accounts.

Work With a Mortgage Broker to Get the Lowest Mortgage Rate

A Mortgage broker is a professional who specializes in helping borrowers find and secure the best rates. They have experience and extensive knowledge of the market and can help you navigate the perplexing world of home financing.

Brokers are quintessential to getting you the best rate. They can find you the best option based on your financial circumstances. In addition, they can negotiate and handle correspondence for you. Moreover, mortgage brokers can access exclusive rates and programs that aren’t generally available to the public, so it’s best to check in with a broker when conducting research.

Weigh Your Options

Never settle for the first mortgage offer. Shopping around and comparing different lenders to find the best fit for you. Not all are created equal and weighing your options can lead to big savings over the course of the mortgage term.

Comparing and shopping around also entails reviewing the terms and conditions, and the length and penalties associated. Making an informed decision requires research and understanding the options available. The right broker can help guide you through this process.

Contact HW Advantage For All Your Mortgage Needs

At HW Advantage, our expert team is dedicated to getting you the best rates along with great, quality service. Check out reviews from our satisfied customers. Contact us today for all your home financing needs.