Interest Rate
The percentage of the loan balance the lender charges as the cost of borrowing, paid annually but accrued daily.
Your interest rate determines the largest line item in your mortgage payment, the principal-and-interest portion. On a 30-year loan, a half-point difference in rate can swing tens of thousands of dollars in total interest paid.
Rate is influenced by your credit score, loan-to-value ratio, loan type and term, property type, occupancy, and current market conditions. Lenders publish daily rate sheets that move with the broader bond market, often shifting multiple times in a single day during volatile periods.
The rate alone doesn't tell the whole cost story, that's why the APR exists. A rate quoted alongside heavy discount points isn't directly comparable to a no-point rate, so always compare rate-and-cost combinations rather than rates in isolation.
Related terms
Other terms you'll see alongside Interest Rate
A blended figure that combines the note rate with most upfront loan costs to express the true yearly cost of borrowing.
A lender's commitment to honor a specified interest rate for a defined period, regardless of market movement.
Prepaid interest paid at closing to permanently lower the loan's interest rate.
A home loan whose interest rate stays the same for the entire repayment period.
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