How Mortgage Rates Are Determined

Curious to learn more about what goes in to calculating your mortgage rate? Here are the basics.

Mortgage rates change every day, and each one is different. Here’s why.

Mortgage rates are determined by both external factors, like the economy, and personal ones. Some of the personal factors that play a part in determining your interest rate include:

Your Credit Score: The better the score, the lower your mortgage rate.
Your Debt-to-Income Ratio: The lower it is, the better your rate will be.
Downpayment: The more you put down on the property, the better the rate.

Of course, you can do all of the above right, and the economy can still keep rates up. When inflation and unemployment go up, expect interest rates to rise too. The Federal Reserve also has a say in the rates, by setting the rate that banks use when lending to each other.