What Affects Your Mortgage Rate

Your credit score is one of the biggest personal factors in your rate. Higher scores generally signal lower risk to a lender, which may earn more favorable pricing, while lower scores often mean a higher rate. Steady on-time payments and low balances help. There's no single magic number, since programs differ.

Discount points are an up-front fee you can pay to permanently lower your rate. One point usually costs 1% of the loan. They may be worth it if you'll keep the loan long enough for the monthly savings to outweigh the cost. If you might move or refinance soon, they often aren't.

Mortgage rates move with the bond market, especially the 10-year Treasury, plus inflation news and Federal Reserve signals. When investors expect higher inflation, rates tend to rise; when the economy looks shaky, they often fall. The Fed doesn't set mortgage rates directly, but its moves ripple through the market that does.

Your interest rate is the cost of borrowing the money itself. The APR, or annual percentage rate, folds in certain fees to show a broader yearly cost, so it's usually a bit higher. Rate tells you the monthly payment math; APR helps you compare loans. Look at both when you shop.

Yes. A rate lock holds a quoted rate for a set window, protecting you if rates rise before closing. Locking often makes sense once you're under contract and comfortable with the number. The trade-off is that if rates fall after you lock, you usually don't get the lower one automatically.