Real Estate Term
Interest Rate
The percentage charged by a lender for borrowing money, typically expressed as an annual rate.
What is Interest Rate?
An interest rate is the percentage a lender charges you to borrow money, expressed as an annual rate, and it directly determines the cost of your mortgage. Even a small change in the rate can meaningfully raise or lower your monthly payment and the total interest paid over the loan. Rates depend on the type of mortgage, the term, the lender, and broader economic conditions.
Frequently asked questions
Related terms
Fixed-Rate MortgageA mortgage with an interest rate that remains constant throughout the term.Variable-Rate MortgageA mortgage where the interest rate fluctuates with market conditions.AmortizationThe process of paying off a loan over time through regular payments that cover both principal and interest.PrincipalThe amount of money borrowed in a mortgage, excluding interest.MortgageA loan used to purchase real estate, with the property serving as collateral.
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