Mortgage rates are the interest rate charged on a home loan, reflecting how much it costs to borrow money to buy a house. They ebb and flow over time, often reflecting changes in the economy on a national level, but also your personal financial circumstances.

When you take out a mortgage, you’re paying back the principal and interest over a period called a term. The most common term is 30 years, and your monthly payment includes both the principal and interest—plus property taxes and mortgage insurance (if applicable).

Understanding Mortgage Rates: How They Affect Your Home Purchase

A number of factors can impact mortgage rates, including the size of the loan you’re seeking, your credit score, and your location. The prevailing mortgage rate is also important to consider, which can be found through online tools like the Freddie Mac calculator. Prevailing mortgage rates are typically tied to the 10-year Treasury bond yield, so it’s easy to compare rates across lenders.

Aside from a stable place to live, homeownership has a host of benefits that go beyond the emotional toll of owning your own home. It builds equity, which can be used to fund future purchases or provide a safety net during a financial crisis. It also fosters community and creates generational wealth. Securing the lowest mortgage rates can save you significant sums over the life of your mortgage.