The mortgage interestrate that you are ultimately going to be charged will be a major factor in deciding which mortgage you will take out and also, which mortgage lender you will go to. The mortgage interest rate that you are going to be charged will dictate, for the next few years at least, 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 bills and leisure time.

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

The length of your incentive period will also dictate, in part, the actual mortgage rate that you are being charged. For example, you may get a very low fixed rate mortgage if you only fix it for a period of 6 months, but a slightly higher interest rate if instead you are trying to fix the mortgage rates for 5 years. Tied into this, there may be a further lock in period once the initial incentive offer has ended, during which you are forced onto the bank’s standard variable rate mortgageproduct. 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 rate that you are offeredwhen you first take out your mortgage. 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 point.

Trying to compare 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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