The interest rate on a loan used to purchase or refinance a home is known as the mortgage rate. Several elements, such as the state of the market and the perceived riskiness of the loan, combine to form the interest rate. However, the impact of one’s mortgage rate is often overlooked. You can save tens of thousands of dollars in interest over the life of your loan with just a little bit of homework and forethought. Finding bmo mortgage rates that works for your specific needs is essential. Read on to discover six methods to reduce your mortgage interest rate. Shop around for the most affordable mortgage rate. Getting the best possible mortgage rate is the first order of business. Before applying for a loan or refinancing an existing one, you should familiarise yourself with how interest rates function. Market conditions, credit history, and the size of the loan are just a few of the variables that affect interest rates. Your interest rate will be greater if you have excellent credit and borrow a significant sum of money for a long-term fixer-upper than if you have bad credit and borrow a small amount of money for a short-term flip. Look around at other financing options. Shopping around for the best loan terms can help you save money in the long run. Compare fixed-rate mortgages to variable-rate mortgages (vars) and term loans to balloon loans. If you anticipate being a long-term resident, a fixed-rate mortgage may be the best option for you. When the time comes to sell the home and move on, a mortgage with a variable interest rate is the best option. Compare loan rates and terms from several lenders. Think about the length of the loan while comparing options. For those who intend to make a long-term commitment to their residence, a 30-year fixed-rate mortgage often makes the most financial sense. Shorter-term mortgages often have lower monthly payments over the life of the loan due to lower interest rates than longer-term loans, making them more cost-effective if you know your house’s value will improve but don’t plan to stay in the property for at least 10 or 15 years.