A mortgage rate is the yearly interest rate your lender charges on the money you borrow to buy a home, expressed as a percentage of the loan balance. If your rate is 7% on a $300,000 loan, you owe roughly $21,000 in interest over the first year before any principal is paid down.
Rates move with the broader economy, especially long-term bond yields, inflation expectations, and Federal Reserve policy. When inflation is hot, mortgage rates usually rise. When the economy cools, they tend to ease.
Two things to keep straight: the rate is not the same as the APR, which includes fees, and a fixed rate stays the same while an adjustable rate can change later. Comparing APR and total interest over the full loan term gives a clearer picture than the headline rate alone.
Sources
This is general information, not professional financial advice. For decisions about your situation, talk to a qualified professional.
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