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Is the Lowest Mortgage Rate Always the Best Choice?

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For a lot of people looking to acquire a mortgage, the math seems pretty simple: A mortgage with a lower interest rate means that you will end up spending less money than a mortgage with a higher one. However, choosing a mortgage simply because it offers the lowest rate is not always the best course of action.

There are a lot of other conditions you should be aware of when selecting the mortgage that is best suited to your financial needs and goals. While lower interest rates will help keep your monthly payments low you should also consider:

  • Your ability to make prepayments
  • Your ability to make additional principal payments
  • How flexible your mortgage is when it comes to refinancing, if necessary
  • The payout penalties
  • The amortization period

If you choose to go with a variable rate mortgage you should also consider what the prime rate is likely to do over the course of your mortgage. All of these factors will impact your financial situation in some way, so they need to be considered carefully.

If you have any questions about selecting a mortgage that is best suited to your financial needs and goals, or any other questions about the mortgage application process, you should contact your mortgage broker. They will be able to offer you more detailed information based on your particular financial situation.

Written by
Joe Jacobs

Joe began his mortgage career in 2004 and is a Managing Partner with Mortgage Connection. Joe prides his business on enhancing the client experience, with a team fully engaged in making the mortgage process enjoyable and streamlined for the client.

He is a regular mortgage voice for many media outlets including, bestselling author Bruce Sellery’s online financial column “Ask Bruce”, MoneySense Magazine, The Calgary Herald and BNN.

A passion for Calgary inspires Joe’s business and he is proud of the charitable work Mortgage Connection does annually. He is a father of two great kids and husband to an awesome wife. He also loves runs with his two Black Labs-Miles and Rosie and heading to the wilderness when he can.

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