What Affects Your Mortgage Rate?
Mortgage interest rates are at largely affected by economic factors. These factors are a nation’s Gross Domestic Product, Consumer Price Index, and PPI and inter bank rates laid down by the central bank. Thus economic indicators define the broad range of mortgage rate. The demand and supply forces also act upon on the rate of interest on loans just as they act upon the price of a commodity.
The mortgage rate for a particular type of loan applied for by a particular borrower will depend on individual factors. This would include the type of loan opted by the borrower, i.e. fixed or flexible rate mortgage. One more individual factor that plays a major role is the borrower’s credit rating. The borrower who has an average credit rating will be able to obtain more favorable interest rates as compared to the one having bad credit rating.