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Mortgage Rates More under the Floor

By Jack Smith Subscribe to RSS | April 27th 2012 | Views:

"Less than the first," heard someone say anything like that. Like most of out there, were likely to be initially skeptical and confused with the concern of mortgage rates. We tend to think the main refinancing rate as the invisible "floor" of lending rates. The best customers can get very close to that plan. It is theoretically possible, we have reason to be actually on the floor, but you may not be beneath it.

However, generally lenders offer mortgages to first less than 0.5% to 0.7% less. So the floor is not as low as you can go. There is something under the "floor". The rate known as "prime" was the popular benchmark for lending in Canada. When the business reporter gets to know about interest rate movement, usually talking about what is happening with the first. But there are other landmarks in the rates of money, although they are typically used by professional money managers. The most important of these is the banker's acceptance rate.

While "prime" is a set rate is offered to your best customers by a lender, banker's acceptance rate is that financial institutions use to lend money to another. And is generally well below the rate. Look for the section "money rates" of your favorite newspaper, and is confronted first with the banker's acceptance rates for yourself. "Interesting," thinks, "But why is it important?" Well, as new lenders begin to offer an innovative slate of new options, loan mortgage new has emerged that is based on the banker's acceptance rate: offering mortgage rates of 1% over the 3 months acceptance banker.

If you compared the low based on the first variable rate mortgage-first less than 0.5% to 0.7%-with the new basic rate adjustable BA, you would find that the rate of BA would have delivered significant savings in recent years, as rates were falling. There are two reasons for this. Firstly, the BA rates historically have been significantly lower than the first. Secondly, the first rate tends to be "stickier" in an environment where prices are falling. Often, the more fluid, market-based rates BA deliver faster rate variation.

Any variable or adjustable-Ontario mortgage is an excellent option when interest rates are falling or stable. Not surprisingly, they were a very popular choice in recent years. There are some rumblings now that rates may start to increase, but the flexible rate mortgages are still an excellent choice for those looking to save some interest.

As always, you should consult a professional to find the mortgage loan that suits your personal needs. An independent mortgage broker can provide information on a wide range of mortgage options from a variety of lending institutions, so you can compare features and options at a glance.

And remember, it is worth taking time to look beyond first and explore what was "under the floor" in the options of your choice on mortgage rates!

Jack Smith - About Author:
Author has experience in providing information about Best Mortgage Rates and Mortgage Advice and solutions. For more information on Mortgage Rates, Please visit:

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