Mortgages & Financing
How do mortgage rates work and what moves them?
By Steve Lockhart
The short answer
Your mortgage rate is the yearly cost of borrowing the loan, shown as a percentage. It moves at two levels.
Full answer
Your mortgage rate is the yearly cost of borrowing the loan, shown as a percentage. It moves at two levels. The first is the market: lenders price loans against what it costs them to hold and sell money, which shifts with inflation, Federal Reserve policy, and the bond market. That level is beyond any individual, and no one can truthfully promise where it goes next. The second level is yours: your credit score, your down payment, your loan type, and the term, along with choices like discount points and rate locks. That level you can shape, and it is where the rate you want is won or lost. A rate lock holds your rate for a set window, usually 30 to 60 days, while the loan processes. Shop with a trusted local lender, compare the full package including fees, and remember that the best rate on paper only means something if you actually qualify for it and the fees do not eat the savings.
Go a little deeper
Frequently asked
Questions people often follow up on
Should I wait for rates to come down?
Nobody can promise where rates go, and waiting carries real cost: rent keeps moving while you wait, and prices can move too. What you control is your own situation. If the payment fits your budget now and the home fits your life, buying can still make sense, and a future refinance stays a possibility if rates ever become favorable.
When should I lock my rate?
Once you are under contract and a closing date is on the calendar. A lock protects you if rates rise before closing, and your lender offers terms like 30, 45, or 60 days. Ask what the lock costs and what it covers before you commit to it.
Is the advertised rate the rate I will get?
Often not. Advertised rates assume a strong score, a large down payment, and sometimes the purchase of points. Ask for a quote built on your real numbers with no points, then compare the full picture, payment and fees, across lenders before deciding.
The Lockhart Method
The Lockhart Method
Your Home | My Strategy | Proven Results
My strategy: make the personal side as strong as possible, and let a trusted local lender handle the timing. We compare your real quote with the fees visible, and we keep the refinance possibility honestly on the table if rates ever move in your favor.
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