# Interest rate

> A mortgage interest rate is the yearly cost of borrowing as a percentage of what you owe. How the monthly charge is figured and what moves your rate.

URL: https://mail.mortgage-math-us.com/glossary/interest-rate/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**The interest rate** is the cost you pay each year to borrow the money, expressed as a percentage of the loan balance. It sets your principal-and-interest payment; unlike the [APR](https://mail.mortgage-math-us.com/glossary/apr/), it doesn’t include points or lender fees.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| 30-year fixed average | 7.24% | [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) | Week of Oct 29, 2026 |
| 15-year fixed average | 6.6% | [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) | Week of Oct 29, 2026 |

## How the monthly charge is figured

Mortgage interest is charged on the balance you owe: the annual rate divided by 12, times the balance. On a $300,000 loan at 7.24%, the first month’s interest is $1,810 of a $2,044 payment. As the balance falls, so does the interest, which is why later payments go mostly to [principal](https://mail.mortgage-math-us.com/glossary/principal/).

Small rate differences add up. Half a percentage point higher on the same loan raises the payment to $2,147, or $103 a month — about $36,961 over 30 years.

## What moves your rate

- **The market.** Freddie Mac’s weekly averages are 7.24% for a 30-year fixed loan and 6.6% for a 15-year — see the [PMMS](https://mail.mortgage-math-us.com/glossary/pmms/).
- **Your file.** Credit score, down payment and loan type all change the price a lender quotes.
- **Your choices.** Paying [discount points](https://mail.mortgage-math-us.com/glossary/discount-points/) lowers the rate; a [rate lock](https://mail.mortgage-math-us.com/glossary/rate-lock/) holds it until closing.
- **Fixed or adjustable.** A [fixed-rate mortgage](https://mail.mortgage-math-us.com/glossary/fixed-rate-mortgage/) keeps one rate; an ARM’s rate can change later.

The [mortgage rates guide](https://mail.mortgage-math-us.com/buying/mortgage-rates/) explains how to compare quotes.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average; 15-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [CFPB: What is the difference between a mortgage interest rate and an APR?](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-mortgage-interest-rate-and-an-apr-en-135/)

_General information, not financial advice._