What affects a mortgage rate

Mortgage rates move with the broader bond market, inflation expectations, and what investors will accept to hold mortgage-backed securities. A lender’s own costs and business goals sit on top of that. That is why a rate you saw last month, or on a billboard, may not be the rate on your offer.

Lenders price for risk. Credit history, the size of the down payment or remaining equity, the loan type, whether the home is a primary residence, and the length of the term all feed the price. A 15-year fixed loan often carries a lower rate than a 30-year fixed loan, with a higher monthly principal-and-interest payment.

Points are upfront interest you can pay to lower the note rate. A lender credit does the reverse: the rate is higher, and the lender applies a credit toward closing costs. The cheaper monthly payment and the cheaper closing are not always the same choice.

Advertised rates usually assume a specific credit profile, loan size, occupancy, and point structure. Your offer can be higher or lower. The only rate that applies to you is the one a lender puts on a Loan Estimate or a locked lock agreement after reviewing your application.

MortgageDirectory.com does not publish or lock rates.