Mortgage rates seem to increase or decrease on day to day basis, one day they are on 4% and the next day on 4.25%. Have you ever wonder why does this happen? Let’s take a look.

Many factors are involved in affecting mortgage rates. It’s almost like mortgage rates changes with the change in weather conditions which is not really false because extreme weathers do affect mortgage rates for examples devastating hurricanes have affected the interest rates.

However the practical reasons behind the modifications in these rates are slightly different. Most importantly the economic conditions play a major role in this respect. What are the market conditions? Are home sales going up or down? Has government announced any statement regarding interest rates or not? Similarly stock market position also causes interest rates to go up or down.

But according to mortgage experts the most crucial factor that affects the mortgage rate is the bond market. Bond market refers to the bond sale of government debt. In mortgage business we often hear that interest rate follow 10-years Treasury bond. This means that when investors buy government bonds they are paying higher interest rate followed by the mortgage rates. This relationship has become true over the period of time.

Now the question which rises at this point is, even if rates are increasing or decreasing how do you know that these are competitive rates? The answer to this question is that you can compare the rates online through websites of some reliable banks in your area.

Another feature that customers are using these days is a tool provided by Finance Bureau. By using this tool you select your current location and results show the current rates and the list of lenders that are offering those rates in an easy and understandable format. In this way you can compare the rates banks are offering and the rates offered by most lenders. This tool also allows you to compare the interest rate over five and thirty years mortgage plan and also provides you information for getting best rates on your mortgage.

But it should be always kept in mind; no matter the interest rates go up or down, your credit score will always play an important role in determining your mortgage plan. If you want to improve or check your current credit score you can always contact us and our specialists will guide you in best possible way.

Contact us:
Ph: 905-216-5563

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