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Mortgage rates determine the interest you pay on your home loan. It’s the cost your lender charges you for taking out a mortgage. Borrowers can choose between a fixed or variable interest rate depending on what type of mortgage they choose.
When you're exploring the housing market or planning to buy a home, understanding what influences mortgage rates can help you make informed decisions. One lesser-known factor is tariffs—fees placed on imported goods. While tariffs don’t directly set mortgage rates, they can affect them by influencing the overall economy.
For example, if tariffs lead to higher costs for goods and materials, this can increase inflation, which may cause mortgage interest rates to rise. On the other hand, if tariffs slow economic growth or create uncertainty, mortgage rates may trend lower as a result of changes in broader financial policy.
It’s important to remember that mortgage rates are shaped by a variety of factors including inflation, investor demand, and global events—not just tariffs. At PrimeLending, we keep a close eye on market trends so we can guide you through the home loan process with confidence.
Ready to learn more? Fill out the form below to connect with a loan officer and get a personalized mortgage rate quote based on your unique needs and homeownership goals.
APR on a mortgage stands for annual percentage rate and is often seen following a mortgage rate. Mortgage APR includes the interest rate plus all fees and other costs involved in getting the loan, such as origination charges, discount points and any other costs. Since APR takes these costs into account, it appears higher than the interest rate and can be a better representation of the actual cost of the loan. When comparing loan estimates, always be sure to compare APR figures.
Current mortgage rates are determined by economic conditions, government regulations and other private investments that are all part of the larger U.S. economy. That means mortgage rates move up and down daily, based on the current and expected rates of inflation, unemployment and other economic indicators.
However, you have some control over several key factors your lender will take into consideration to determine your home loan interest rate. These include your credit score and loan-to-value ratio (LTV).
Your credit score is determined by five factors which include:
The higher your credit score, the more likely you are to get a lower mortgage rate. However, PrimeLending offers hundreds of loan programs, including down payment assistance programs1, that work with a wider range of credit scores.
The loan-to-value ratio is the proportion of the mortgage amount compared with the home’s price or value. To calculate your LTV, divide the loan balance by the appraised value of the home.
Here’s an example of LTV. Suppose you buy a house for $200,000, put $40,000 down and get a $160,000 mortgage, your loan-to-value ratio is 80%. Loan-to-value ratios that are greater than 80% are typically considered high, creating greater risk for the lender. This may result in a higher mortgage rate for the borrower.
PrimeLending can offer you many different types of loans, including conventional and government-back FHA, VA and USDA loans. They all offer different rate scenarios dependent upon their specific program details and the size of your down payment.
All of these variables are why PrimeLending doesn’t advertise rates on our website — the best way for us to provide you with an accurate estimate is to calculate your rate using your numbers. Contact us to get your free mortgage rate quote today.