A mortgage rate indicates the amount of interest a lender charges you when you take out a mortgage. It’s always in your best interest to get the lowest rate possible, because a lower rate means lower monthly mortgage payments. You can either choose a fixed-rate mortgage (interest rate stays the same) or a variable-rate mortgage (interest rate fluctuates), which are both described on other pages in this guide.
Lenders prefer working with people who are likely to make their loan payments in full and on time. To determine how likely this is, banks look at your credit score. If you have an excellent credit score, you’re more likely to quality for a lower interest rate. If you have a lower credit score, you will likely get a higher rate or, if you have really poor credit, you may not qualify for a loan at all. When selecting a mortgage, do your homework! Finding the best deal will likely involve shopping around to several different lenders.
