Loans with an interest rate of 1 to 99 percent have low monthly payments, but can be offset by very high initial costs. After all, the average rate for a 30-year fixed mortgage is 3.10 percent, according to Bankrate's weekly national lender survey, and that's a record low rate. Therefore, a 1.99% mortgage may not be as good as it seems. It's a really low rate, but you could pay two or three times more at closing than you would for a higher rate, for example, closer to 3%.
And while you'll usually get ahead if you stay in your house for a long time, if you're buying a starter home or a home you're not sure you're going to live in for more than three or four years, it might actually be smarter to get a higher mortgage rate. Most banks that offer car loans offer similar rates of just 3% to the most qualified customers. However, there is a lot of variation among banks in terms of the highest allowed APR, with maximum rates ranging from 6% to 25%. Banks that offer loans with higher rates generally accept applicants with worse credit, while more risk-averse lenders don't offer loans to applicants with scores below 600.