How are mortgage interest rates determined?
Short answer
Fannie Mae describes the mortgage interest rate as the annual cost of borrowing for the home. Offers differ by loan and by lender. Durable factors can include , property location, purchase price, loan amount, term, and loan type.
Full explanation
A mortgage interest rate is the yearly cost of borrowing to buy the home. Fannie Mae's consumer guidance says that rate can differ from one loan to another and from one lender to another.
Several loan-specific facts can affect the offer: credit score, where the property is, the purchase price, how much you borrow, the term, and the type of loan. Those are durable pricing factors, not a snapshot of today's market average.
Shopping still matters. Fannie Mae notes that another lender may offer a lower rate on a similar loan. This page does not publish a current market rate or a qualifying rate.
Sources reviewed
Homebuyer Frequently Asked Questions
Related mortgage terms
Last reviewed
September 10, 2026