When we go to auto dealership to buy a car, we all know the cheapest doesn’t mean the best. We look at different features of the car, comparing design, safety, and automakers. The perfect fit to our needs is our main priority. The price comes second. But when it comes to mortgage, consumers seem to be concerning only about the price (the interest rate). But is the mortgage rate everything?

No, mortgage rate is just one of the factors that should be considered. Similar to car shopping, consumers should carefully look into all product features that come with a low interest rate. But consumers argue that mortgages are all the same, this is not the case. There are over 20,000 different mortgage products available today on the market. Each one comes with completely different features and different conditions. Therefore, it is extremely important for consumers to understand, what they are choosing.

Summarizing main differences, here is what you should be looking for:

If one of the penalty options is Interest Rate Differential (IRD), ask your lender how they calculate it, ask what their current posted rate is. Different lenders have different ways of calculating it. Posted rates can vary significantly as well. Make sure you understand all the differences.

When you find a deeply discounted mortgage rate, talk to a mortgage specialist. They can help you find the right combination of a low rate and the options you need to purchase the home and assist you in understanding all the terms of your contract, so there won’t surprises for you in the future.