The Factors Which Impact Your Home Loan Interest Rate

Home Loan Interest Rates

When looking for a new home mortgage loan, often times the first question a consumer has is, what will my interest rate be? The answer to that question always is, it depends on a number of factors. In this article, we will discuss some of the factors which impact your interest rate.

Factor 1: Current Market Interest Rates

The first and simplest thing that will affect your home loan interest rate, is the current market rates for mortgage interest rates. Interest rates themselves will vary from day to day and that is the starting point for your interest rate, but as we will discuss further, because it’s not necessarily the end point.

Factor 2: Your Loan Term

Generally speaking, the longer the term of your mortgage loan, the higher your interest rate. You will pay a higher interest rate on a 30 year fixed loan, as opposed to a shorter term 20 year or 15 year fixed loan.

Factor 3: Your Credit Score

Your credit score will also play a major role in determining your interest rate. For instance, someone with a 760 credit score, will generally receive a better interest rate than someone with a 640 credit score.

Factor 4: Your Equity (home refinance) or Down Payment (home purchase)

The percentage of your down payment on a home purchase, will also play a factor in your interest rate as well. The lower your down payment, the generally higher your interest rate will be.

As well, on a home loan refinance, generally the larger percentage of equity you have, the lower interest rate you might receive.

Factor 5: The Property Type

The type of property you are obtaining a home loan on, will also affect your interest rate. In general, if you are purchasing or refinancing a single family residence, that is your primary home, you will receive the best interest rate available for your situation.

If the property you are purchasing is a secondary home or an investment property, then the interest rates can be slightly higher.

In addition, if the property is a condominium, a manufactured home or a multiple unit property, then the interest rate you receive, can also be higher.

Factor 6: Your Lender

Finally, the factor that seems most obvious, but is sometimes over looked, is the home loan lender you use for your loan. Not all lenders interest rate or fees are the same.

Most lenders may offer a seemingly similar variety of home loan programs; however, interest rates and fees can vary widely from one company to the next.

For this reason, it’s always important to work with a trusted professional work, who can provide you a fair market interest rate.

As always, everyone’s situation is unique and to properly look into your specific situation, make sure and consult with a licensed local lender such as Strategic Mortgage to fully look over your complete situation.

For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 703-5844 or by emailing: or online at  

Strategic Mortgage, LLC – AZBK#0909514 – NMLS#158804 – Equal Housing Lender

Vasilios Kamboukos – NMLS#160440

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