Mortgage Rates

Why Monitor Mortgage Rates?

Mortgage rates vary and for the home buyer it is important to monitor their activity prior to borrowing any money for a mortgage. Rates vary according to several factors - the Federal Reserve and the bond market. Monitoring mortgage rates over 3-6 months allows you to pick the best time to take out a mortgage. But you don't have to do it all alone - there are information packages that will give you lots of details about watching mortgage rates and picking the best products.

Low mortgage rates make it is far easier to borrow and purchase a house, particularly for first home buyers. With low mortgage rates a buyer can afford to borrow a greater amount or borrowers with lower repayments over a longer period of time. However, even with low rates it is always a good idea to be fully aware of what the options are when embarking on a new mortgage.

In addition to compiling information on mortgage rates, it is important that you keep track of how much money you're entitled to borrow and how much deposit you will need to have. For example, if you are permitted to borrow 85 percent of the value of your home, then you'll need to raise the other 15 percent as a deposit. Costs for 100 percent loans are often higher as lenders will charge you mortgage insurance and other fees, so this is another area where you want to proceed with caution. The more you can save in terms of an initial deposit on your home, the better your terms and repayments will be.

There are basically two types of mortgages, a fixed or an adjustable or variable rate mortgage. Adjustable mortgage rates are always several percentage points below the fixed rate which is good in the short term, but do not offer the security of being locked in for a particular term which can be troublesome later on. It is also possible to get a combination of fixed and adjustable from some lenders and many borrowers do exactly this to benefit from both options.