Today’s Mortgage Rates

A mortgage interest rate is the percentage you pay to borrow money for a home loan.

Interest rate is part of the annual percentage rate, or APR. If you subtract interest rate from APR, the difference represents fees and expenses charged for getting a mortgage, spread over the life of the loan.

The best way to understand how mortgage rates work is to see them in action. A good way to do that is to use a calculator. We have two that show you what mortgage interest rates mean for you as a home buyer.

If you want to know how mortgage rates work when it comes to your monthly payment, try our mortgage calculator. Change the interest rate and see how it changes your monthly payment amount.

If you want to explore how your mortgage rate works after you own a home, use our amortization calculator. It shows how much of your mortgage payment goes to your loan balance – the amount you borrowed – and how much goes to interest over time.

Mortgage rates are determined by multiple factors that fall into two categories:

• Economic: Factors like the stock market, the Federal Reserve, inflation and the housing market all affect mortgage rates.
• Personal: Your credit profile, how much debt you have compared to your income, and how much you’re borrowing are all examples of details about you that determine your mortgage rate.

To learn more, read How Are Mortgage Rates Determined?

The more likely it is you can make your mortgage payments, typically the better interest rate you’ll get.

What helps determine that? Here are some of the things we look at.

• Your credit profile, because it shows how you manage debt and pay your bills.
• The size of your down payment, because it affects how much you need to borrow – and pay back.
• How much debt you have compared to your income, because you need enough in your budget to afford your home.

While all these things are important, it’s also important to remember we’ll work to get you the best rate we can while helping you reach your home buying goals.

A mortgage rate lock keeps your interest rate from changing for a period of time. Rate locks usually last between 15 and 60 days.

You might want to lock your rate if you expect rates to go up before you close on your loan. On the other hand, if you think rates will go down, a rate lock might not benefit.

Our Home Loan Experts can explain when locking your rate is a smart move. You can also learn more by reading Mortgage Rate Lock: A Guide To Protect You From Rate Fluctuations.

Rates are calculated using a set of details called assumptions. They can include the following:

• A loan amount
• Points paid at closing to get a lower interest rate
• A debt-to-income ratio
• A credit score

The closer your details are to assumptions – you have the same credit score, the same DTI, the same loan amount – the more likely it is you’ll get a similar rate.

Just like rates, assumptions can change. And assumptions differ from lender to lender. So it’s a good idea to check assumptions when you’re comparing rates. To see ours, select the View Legal Disclosures link under where rates are displayed.

Interest rate is the percentage you pay to borrow money for a home loan.

There are also fees and expenses charged for getting a mortgage. Most people add these to their loan and pay for them over time with their mortgage payment.

Those two things together equal APR, or annual percentage rate. The math looks like this:

6.75% APR - 6.5% interest rate = .25% for fees and expenses spread over the length of the loan

A mortgage point – sometimes called a discount point – is a one-time fee you pay to lower the interest rate on your home purchase or refinance. Here are the key things to know:

• One discount point costs 1% of your total home loan amount.
• You can generally expect each point to lower your interest rate by 0.25%.
• Each quarter of a percentage point can lower your monthly payment by about $30.
• And of course a lower rate means you’ll pay less interest.

Our Home Loan Experts can help you understand if paying points is right for you.

Mortgage rates can change daily, sometimes more than once a day. If you’re watching rates, it’s helpful to know 0.25% (a quarter of a percentage point), roughly equals a $30 change in your monthly payment.