Definition
The cost of borrowing money, expressed as a percentage of the loan amount charged annually. Mortgage interest rates are influenced by the Federal Reserve, bond markets, inflation, credit score, down payment, loan type, and loan term. Even small rate differences significantly impact total costs — a 0.5% rate difference on a $350,000 30-year loan changes total interest by roughly $38,000.
Related Mortgage Terms
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
- Fixed-Rate Mortgage
A mortgage with an interest rate that remains constant for the entire loan term,...
- Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that starts with a fixed period (typically 5, 7...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Appraisal
A professional assessment of a property's market value conducted by a licensed a...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.