Your Mortgage Rate With 20 Percent Down: A 20% down payment from a first time borrower doesn’t always generate a better rate than one with a lesser down payment.
1. When the down payment is less than 20% for a first time borrower, the mortgage rate is often secured by insurance. Because the insurance reduces the risk for the lender it can result in a lower mortgage rate to the borrower.
2. Conversely the loan with a 20% down payment does not enjoy the reduced rate as no insurance is provided against the risk so the rate becomes higher to the borrower.
Do you have questions about mortgages in Guelph, Kitchener, Waterloo, Cambridge and surrounding areas?
Contact us today for help!