When looking for mortgages, it is quite obvious that you are looking for cheap mortgages, because who wants to pay more than necessary for a mortgage. However, finding the mortgage that will be the cheapest and best for you is not always super easy as there are various factors that come into play.
Here we will go through a few different things that can affect the price of your mortgage and which determines whether you can get a cheap loan or not. Some things are a little easier to influence and some are not quite as easy, but for those who have good control and who put a little energy into finding cheap mortgages, it is usually possible to obtain a good loan.
What to consider when looking for cheap mortgages?
The first thing you should investigate is what interest rate the bank offers. A lower interest rate is something that will obviously affect the loan and make it cheaper. A low interest rate is a big step closer to a cheap mortgage and lenders are happy to compete with each other by trying to offer good mortgage rates.
However, it is not the interest rate that controls everything. A mortgage loan is divided into different parts. A mortgage loan where you have the house as collateral. The mortgage is the cheapest part of the loan. In addition to this, there is usually a top loan that is a loan without collateral and thus is a more expensive loan to take.
How much of the loan you can take as a mortgage loan differs between the banks. Therefore, it is important to know what the different banks say when it comes to mortgage loans as it can have a significant impact when you want the cheap mortgage. Being able to get a larger portion as a mortgage and just having to take a smaller (or no) top loan can be what makes your loan cheap.
To negotiate a mortgage
A good tip is to negotiate the mortgage with your bank. It is often possible to bargain some on the price and bring down the interest some. This goes especially well if you have a good finances and can come up with some concrete arguments for being a good borrower.
You should not be afraid to negotiate and to tell the bank that you can very well switch to another lender if there are better conditions to pick up there. At present, there is a fairly large market for mortgages and this is a lot of money, so most people would like to keep their customers or attract new ones.
Read more about negotiating the mortgage.
Choice of interest rate
The type of interest rate you choose will affect whether a mortgage is cheap or not. Sometimes it will be a cheaper mortgage if you have a fixed interest rate and sometimes it will be cheaper if you have a floating interest rate. What is right here cannot be said in advance but is something that you must consider yourself. However, it should be said that historically, variable interest rates are usually the cheapest.
However, prices vary all the time. This means that the bank that offered the lowest interest rate for a while ago does not automatically have to be the best option right now. It is therefore good to keep track of current mortgage rates and see to it that there have been no major changes.
You can go to our page where we compare mortgages in order to get a small idea of what it costs to take a mortgage. We compare mortgages.