Everybody wants to pay the lowest interest rate possible on their mortgage, right? A lot of the time we spend worrying about whether or not our credit will be good enough to even get a mortgage, but we should also keep in mind that finding the mortgage with the lowest interest rate should also be a priority. Some of the key ways to ensure your home loan interest rate is as low as you can get include:
- Try to keep your employment record as stable as possible. If you are the kind who regularly changes jobs – even if you are continuously employed for many years – then you are less likely to get an interest rate as low as somebody who has a solid history with only one or two employers.
- Save up as large a deposit as possible before you start looking for your mortgage. If you can bring a deposit of something like 20 or 25 per cent to a lender, they will look a lot more favourably on you than someone who only has a five per cent deposit. In some cases, it really might pay to wait a little longer and save a little more to then be blessed with a considerably lower interest rate which will save you a lot of money over the years of your loan.
- Do as much as you can to ensure your credit history is the best it can be. Obviously, this is a long term deal but do make sure you check into all the small things you can do to improve your credit rating.
- Don’t try to borrow beyond your means. If your “income to debt” ratio is low – that is, you can easily make your repayments out of your current income – then the lender will be more likely to give you a lower interest rate, trusting that you will be able to pay off the mortgage in full over time.