Rates & interest
Interest rate
The percentage a lender charges to borrow the principal, expressed annually. It sets your principal-and-interest payment but excludes fees, which is why APR runs higher.
What does interest rate mean?
Your interest rate is the price of the money you borrow, and even small differences compound enormously over a 30-year term. Rates move daily with the bond market, and your individual rate depends on credit score, down payment, loan type, and the property. In Michigan, shopping at least three lenders on the same day routinely uncovers a spread of a quarter point or more for the identical borrower — worth roughly $70 a month on a $285,000 loan. The rate sets your payment; the APR tells you the true cost.
Common questions
What determines my mortgage interest rate?
Your credit score, down payment, loan type, and the property, layered on top of daily bond-market movements. Two Michigan buyers on the same day can get different rates for the same house.
How much does shopping lenders save?
Often 0.25% or more for the identical borrower — about $70 a month on a $285,000 loan. Getting three quotes on the same day is the simplest way to capture it.
Rate or APR — which should I compare?
Compare the rate to judge your payment and the APR to judge total cost. Use both: a low rate with high fees can lose to a slightly higher rate with none.
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