Make sure you choose the right mortgage strategy for you. You will be surprisedat how much you will save if you concentrate on the right mortgage strategy, rather than concentrating on finding the lowest interest rate. Differences in interest rates are peanuts compared to the tens of thousands of dollars you will save with the right mortgage strategy. (Read How to beat the best rate! to see how this works.)

What's the right mortgage strategy? Well, you probably can't answer that question for yourself. What you can do is consult a mortgage specialist who specializes in custom mortgage packages. Why do you need to do this? The main reasons are

-we don't know where interest rates are going.

-economic conditions, both present and future have to be considered.

-A mortgage strategy is a complex, uniquely personalized approach that takes each borrower's situation into account.

All of these issues, and more, will be taken into consideration when you sit down with your personal mortgage consultant. He has the proper training to understand what affects interest rates, which mortgage products are available as well as current economic conditions and, most importantly, he has been trained to use this knowledge as it applies to each client's given status.

Thousands of papers and hundreds of books have been written about the movement of interest rates. But for a basic understanding you need to know the three scenarios that interest rates can take and the two rules that interest rates follow.

Scenario One: Interest rates rise, as they did from 1950 to 1980.

Scenario Two: Interest rates decline, as they did from 1982 to 2003.

Scenario Three: Interest rates remain stable, as they have from 2003 to 2006.

To work with these trends is important, since, if you use the wrong mortgage strategy (for example one designed for falling rates, and then rates go up), you will be paying way too much for your home loan.

In addition to the way interest rates fluctuate, interest rates follow certain immutable laws.

1.Interest rates follow the inflation rate. That is, increases in the consumer price index will lead to increases in interest rates.

2.Interest rates fluctuate according to the state of the economy. In a weak economy, interest rates will be lower and in a strong economy, interest rates will be higher.

Trying to predict interest rates is futile. Interest rates over the last thirty years averaged 9.26%, whereas they are now at about 5%. With this rate, you may choose to take out a 5 year fixed rate mortgage. Remember, by doing so, even without realizing it, you have chosen a mortgage strategy, and this one could be a disastrous one. Refinancing every five years in an increasing interest rate environment would have cost a fortune.

There are quite a few mortgage strategies that mortgage brokers have to choose from. An expert mortgage professional can pick and choose from this mixed bag of strategies and design the perfect one for you.

Here are the basic mortgage strategies:

*5 times 5-A fixed term five year mortgage, renewed 5 times.

*Long term-a fixed rate mortgage for 15, 20 or 25 years.

*Variable rate-a mortgage with an interest rate that changes based on the Bank of Canada base rate.

*Smith Maneuver-the borrower can deduct mortgage interest from income tax.

*More retirement-the equity built up in a residence is used to create retirement income.

*No down payment-calculate the cost of renting while saving for a down payment as compared to taking a larger loan.

*Less than perfect credit-use a loan to repair credit so a mortgage will be cheaper later.

Using the correct one of these strategies in each borrower's case is what it is all about. Using the right strategy is 21 times more important than getting a better interest rate.

That's what a mortgage broker will do when he meets with a client. Each person's individual needs and goals are discussed, and then any mortgage strategies that may be open to him are applied to his situation, under the present and anticipated economic conditions. Not taking these steps with a professional mortgage broker can result in paying too much. A consultation is free, not having a consultation is very expensive.