An interest rate is an additional amount charged on top of the principal amount of the loan by a lender to a borrower. There are many factors that impact mortgage interest rates including type of loan, mortgage points, cash payments and personal financial factors such as credit score, income and the type of home being purchased. When buying a home, the overall mortgage cost is calculated based on the total amount paid back to the lender over the life of the home loan. Find out more on our blog, The Relationship Between Interest Rates, Home Price, And the Cost Ownership.