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Miranda Karl,
Mortgage Professional

The Truth about Mortgage Rates

Getting a great mortgage rate can have a huge impact on your financial future. But applying for the right mortgage and negotiating the best rate with your lender requires professional expertise. I’ll help you understand how mortgage rates work and apply for suitable options so you and your family can choose the mortgage that’s ideal for you.
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Understanding Mortgage Rate


Getting the right rate for your mortgage shouldn’t be a challenge. Learn about mortgage rate basics below by checking out answers to the questions I get most often.

What is interest?

Interest is a percentage of what you’re borrowing that you pay to your lender once your mortgage has been approved. Think of it as the price you pay for using their money.

When you apply for a mortgage, various lenders will offer options with different interest rates (depending on what you qualify for). Whenever you renew or refinance your mortgage, you’ll have an opportunity to renegotiate these rates.

How are mortgage rates calculated?

Lenders typically base their mortgage rates on the following factors:

  • How long your mortgage term is
  • The lender’s posted interest rate (i.e. the rate they advertise publicly)
  • The lender’s prime rate (which they use to set their posted rate)
  • Whether you’re eligible for a discounted rate
  • Whether you choose a fixed-rate, variable-rate, or hybrid mortgage
  • Your credit and employment history
  • How much you have for the down payment

What will my rate be?

Various banks and other lending institutions offer calculators to help potential applicants estimate their mortgage rates, but these are no substitute for getting help from a professional mortgage broker because every borrower is different. When you work with me, we’ll consider your unique situation so you can apply to get a mortgage with the best rate available to you.

Will my rate be the same in 6 months (& how long can I lock in my rate)?

Whether your mortgage rate changes over time depends on what kind of mortgage you get. There are two main mortgage types: fixed and variable.

Fixed mortgages remain the same for your entire term. They tend to have higher rates, but since those rates don’t change, you won’t have to worry about them going up if prime rates rise. This also helps you predict when you’ll be able to pay off your mortgage more accurately.

Variable interest mortgages have rates that change depending on market conditions. They are often less expensive at the front end—and if market rates go down, they can help you save a significant amount of time or money paying off your mortgage. However, you may end up paying more if market rates end up climbing, and changes in interest rates are often unpredictable.

Some lenders provide the option to convert to a fixed interest rate during your term. For more advice on how to leverage these features, contact me to discuss your options.