Interest rates make the news every day. A change to this one. A prediction about that one. Why does it matter and why are so many people interested in the minor ups and downs of interest rates?
When you take out a mortgage, you agree to pay back the entire amount you borrowed (the principal amount) plus interest for the entire life of the mortgage. Over the typical lifespan of a mortgage (25 years is the most common), the total amount of interest, along with any fees you pay, is called, “The cost of borrowing”. The goal is to keep your cost of borrowing as low as possible over the life of your mortgage, so you can enjoy the benefits of home ownership without spending more than you need to.
If you know how much you plan to borrow, you can experiment with various rates to see how they affect your monthly payments with our easy-to-use Mortgage and Loan Calculator.