A mortgage rate is the interest rate charged by a lender on a home loan. It represents the cost of borrowing money to buy a property. Mortgage rates can be fixed or variable and fluctuate based on economic factors such as inflation, central bank policies, and market demand.

Types of Mortgage Rates

Fixed-Rate Mortgage – The interest rate remains constant throughout the loan tenure, ensuring predictable monthly payments.

Adjustable-Rate Mortgage (ARM) – The interest rate starts lower but can fluctuate over time based on market conditions.

Government-Backed Mortgages – Loans such as FHA, VA, and USDA mortgages often come with lower interest rates.

Factors Affecting Mortgage Rates
- Credit Score – Higher credit scores get better rates.

- Loan Amount & Down Payment – A larger down payment can secure a lower rate.

-Loan Term – Shorter loan terms (15 years) usually have lower rates than longer terms (30 years).

-Market Conditions – Inflation, Federal Reserve policies, and economic trends affect rates.

-Debt-to-Income Ratio – Lenders prefer borrowers with lower debt relative to income.