Your mortgage rate determines a huge share of your total cost. Understanding what drives it — and what you can control — puts you in a position to get the best deal available to you.
What Drives Mortgage Rates
Broad economic forces (inflation, the bond market, Federal Reserve policy) set the general level of rates, and you can't control those. But the rate you get also depends on personal factors you can influence: credit score, down payment, loan type and term, and the property itself.
Rate vs. APR
The interest rate is the cost of borrowing the principal. The APR includes the rate plus certain fees, giving a fuller picture of the loan's cost. When comparing lenders, look at both.
Discount Points
You can sometimes pay "points" upfront to buy down your rate. One point typically costs 1% of the loan amount. Whether it's worth it depends on how long you'll keep the loan.
Compare rates and loan offers in one place:
See My Rate OptionsHow to Get a Better Rate
- Boost your credit before applying.
- Put more down if you can — lower risk often means a lower rate.
- Shop multiple lenders; quotes genuinely vary.
- Consider a shorter term, which usually carries a lower rate.
- Lock your rate when you find a good one to protect against increases.
Don't Chase Rate Alone
A rock-bottom rate paired with high fees may cost more than a slightly higher rate with low fees. Always weigh the full picture — rate, APR, fees, and term — together.