Understanding Mortgage Rates: A Plain-English Guide

Your mortgage rate shapes your monthly payment and the total cost of your home — so it pays to understand how it works.

A fixed-rate mortgage locks your rate for the life of the loan, offering predictable payments. An adjustable-rate mortgage (ARM) starts lower but can change over time, which suits buyers who plan to move or refinance.

Points let you pay upfront to lower your rate. If you'll stay in the home long enough to recoup the cost, points can save money over time.

APR reflects the true cost of borrowing, including fees — always compare APR, not just the headline rate.

Use our mortgage calculator to model different scenarios, then talk with a lender to find the structure that fits your plans.