Mortgage Rate

The interest rate charged on a mortgage loan. A mortgage rate, in most cases, is determined by the lender through the prevailing market interest rate. A mortgage rate is expressed as a percentage determined over a number of years.

The prevailing mortgage rate is closely tied to the action to purchase or securitize real estate property and any associated loan. Mortgage rates vary enormously depending on several factors such as the type of mortgage loan, the prevailing market conditions, the borrower’s credit history, the term of the loan and the geographic location.

There are different types of mortgage rates depending on the type of loan and the mortgage lender. These include fixed rate mortgages (FRM), adjustable rate mortgages (ARM) and fixed variable rate mortgages. The type of rate mortgage and term of the loan combined greatly affect the total amount payable throughout the mortgage term.

If you own a home already and would like to refinance, you must be careful. Compare the mortgage rate against the prevailing interest rate and find out whether you will make a saving or a loss. You can use a free online mortgage calculator to find out the values before making a “real” decision.

Mortgage rates fluctuate often. Whenever they increase drastically, it becomes very expensive for a potential borrower to purchase a home. But as they drop, consumers rush to apply for mortgage loans. A consumer should be on the lookout for the most affordable mortgage rates before purchasing a home or refinancing a loan.