Back to Glossary
January 19, 2023
A mortgage rate is the interest rate on a mortgage. Mortgage rates are set by the lender and can be fixed, remaining constant during the loan period, or variable, varying with a benchmark interest rate. Borrowers' mortgage rates differ depending on their credit profile. Mortgage rate averages rise and fall with interest rate cycles, which can significantly impact the homebuyers' market. The mortgage rate is a significant issue for homebuyers wanting to finance a new home purchase with a mortgage loan. Collateral, principle, interest, taxes, and insurance are all considered. A mortgage's collateral is the home itself, and the principal is the loan's initial amount. Taxes and insurance vary depending on where the house is located and are usually an estimate until purchase.