Mortgage Rate

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DEFINITION of 'Mortgage Rate'

The rate of interest charged on a mortgage. Mortgage rates are determined by the lender in most cases, and can be either fixed (stay the same for the term of the mortgage) or variable (fluctuate with a benchmark interest rate). Mortgage rates rise and fall with interest rates and can drastically affect the homebuyers' market.

BREAKING DOWN 'Mortgage Rate'

The borrower's credit score can often play a role in the rate charged on a mortgage and the size of mortgage loan they are able to obtain. The rate charged ultimately determines the cost of the mortgage and the amount of the monthly payment. Therefore, borrowers should always seek the lowest rate possible.

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