What Is a Mortgage Rate?

Your mortgage rate is the interest rate attached to your home loan.
Mortgage rates are influenced by the market price of mortgage-backed securities (bonds backed by U.S. home loans), and they can vary widely depending on:

• Loan type (Conventional, VA, FHA, USDA, Jumbo)

• The lender you choose

• Your credit profile and financial history

Understanding how rates work helps you maximize savings and choose the right loan at the right time.

How to Get the Best Mortgage Rate

1. Check Your Credit Report for Errors

Your credit score plays one of the biggest roles in determining your mortgage rate.
Higher credit scores generally qualify for significantly lower rates—sometimes a full percentage point or more lower than borrowers with average credit.

A one-point difference in rate can reduce your monthly payment by 10% or more. That’s real, meaningful money every month.

2. Aim for Both: Low Rates and Low Costs

Mortgage rates move constantly and can be difficult to predict. Your goal is simple:

✔ Get the lowest rate possible

✔ With the lowest closing costs possible

When comparing loan offers, don’t just look at the rate—look at the fees attached to that rate. Some lenders may offer a tempting low rate but inflate closing costs to compensate.

Pro tip:
Focus on one part of the deal at a time.

• If rate is your priority: Ask for the lowest possible closing costs tied to that rate.

• If closing costs are your priority: Ask what the rate would be at your preferred cost level.

Use these side-by-side comparisons to find the best overall offer.

And don’t forget:
You can use our mortgage calculator to estimate your monthly payment and confirm whether a property fits your budget.

3. Lock In Your Rate

Once you’ve chosen a lender, a rate, and closing costs you’re comfortable with, it’s time to lock in your interest rate.

A rate lock means the lender guarantees your rate for a certain period of time, protecting you from market fluctuations while your loan is being processed.

Mortgage Rates & Refinancing

If you're refinancing instead of buying, mortgage rates matter even more.

The savings from refinancing depend on the difference between your current rate and today’s market rates—and that difference must be big enough to offset the cost of refinancing.

Use our refinance calculator to help determine whether refinancing is the smart move for your situation.

As Forbes explains:
“A one-percentage-point difference in mortgage rates translates into at least a 10% difference in the monthly mortgage payment. For example, on a standard 30-year fixed-rate mortgage, the monthly payment on a $200,000 loan would be $955 for a 4% mortgage vs. $1,074 for a 5% mortgage—an increase of $119 every month.”