The average Canadian homebuyer will need to apply for financing for their home purchase. Such a route makes homeownership accessible, but some may be worried about high interest rates as part of the loan agreement. As borrowers will be making payments involving the loan principal and interest, it is useful to understand more about how interest rates work.
For informational purposes only. Always consult with a licensed mortgage professional before proceeding with any real estate transaction.
Why Are Interest Rates Important?
It is not enough for a borrower to be approved for a loan and pay back only the principal. Lenders take on a certain amount of risk as some individuals may default on a home loan. Interest rates are intended as an incentive
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