what factors dictate the mortgage interestrates you will be looking at?

The mortgage interestrate that you are ultimately going to be charged by your bank will be a major factor in deciding which mortgage you will take out and also, which mortgage lender you will go to. The interest rate that you are going to be charged will dictate, for the next few years at leastand maybe a lot longer, how much the mortgage is going to cost youeach month. It will determine how much of your monthly budget will be being spent on your mortgage and, therefore, how much of your income is available for you to spend on other regular bills and leisure time.

But what factors will be affecting the mortgage rates that are available to youfrom the various lenders? For a start, the type of mortgage that you are interested in will dictate what the lender will offer to you. If you compare best mortgage rates for fixed and standard rates, you would usually find lenders offering special rates on their fixed rates making them less than their standard rates. This is the incentive for you to approach the lender and take out a mortgage. Later, when you have passed the initial cheap phase of the mortgage and the incentive is approaching an end, your lender is hoping that you decide to stay loyal and take the easy option and not remortgage to a better deal within the lender, or worse still, a new lender.

The length of your selected incentive period will also dictate, in part, the actual interest rate that you are being charged. For example, you may get from your lender a very low fixed rate mortgage if you only fix it for a period of 6 months, but a slightly higher interest rate if you are trying to fix the mortgage interest rates for 5 years. Tied into this, there may be a lock in period once the incentive has ended, during which you are forced onto the lender’s standard variable rate mortgage. This time, typically the longer the lock in periodthat follows the incentive, the better the incentive rate that you will be offered at first.

How much you are able to put down as a deposit may also affect the mortgage interest rate that you are offered. For example, if you are unable to put down at least a minimum of a 25% deposit on your new home, then you might find that the interest rate jumps up by a significant quarter or even half of a percentage pointas an insurance policy against you defaulting and owing them a lot of cash.

Trying to compare best mortgage rates on your own is a difficult task. It can be much easier with the assistance of a mortgage broker, and it might save you a small fortune if you can take advantage of some free expert advice.

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