What Economic Factors Affect Mortgage Rates the Most?

1. What Economic Factors Affect Mortgage Rates the Most? If you are planning to make a home purchase, learning about the current mortgage rates is a must. On one side, mortgage borrowers are looking for the lowest mortgage rates. On the other side, mortgage lenders have to manage the risk through the interest rates they charge. Borrowers that have good credit scores and solid finances are most likely to get the lowest mortgage rates. While the financial health of the borrower affects their mortgage interest rates, there are economic factors too that affect the mortgage rates a lot. Inflation With inflation, the prices of everything gradually increase. It is an important factor for mortgage lenders to consider when lending mortgages. Inflation can have a huge impact on the purchasing power of dollars over time. The lenders tend to maintain interest rates at a level that can help them in overcoming the erosion of purchasing power as a result of inflation. Level of Economic Growth Economic factors like employment rate and gross domestic product (GDP) influence mortgage to a great extent. With higher economic growth levels come higher incomes and higher levels of consumer spending. And vice-versa happens from a weakening economy. In order to get the best mortgage rates, you must always take a look at the current mortgage rates so that you can choose the best rates for you. At RateShop.ca, we let you find the best current mortgage rates in Toronto, so that you can compare and choose the best rate as per your requirements.