What is interest rate?

Interest rate is the amount of money charged by a lender to a borrower for the use of borrowed funds. In Pennsylvania, mortgage interest rates vary depending on the type of loan, the borrower’s credit score, the amount of down payment, the amount of the loan, and the length of the loan. For example, a borrower with a high credit score and a large down payment may be able to get a fixed-rate mortgage at a lower interest rate than a borrower with a lower credit score and little or no down payment. The interest rate for a particular mortgage or other loan is usually expressed as an annual percentage rate (APR), which includes not just the interest rate but also any expenses associated with the loan, such as points, closing costs, and other fees. The APR serves as a baseline for how much the loan will cost over the life of the loan. Generally speaking, the higher the APR, the more the loan will cost. Another important factor to consider when looking at interest rates is whether the rate is fixed or adjustable. Fixed-rate mortgages generally have higher interest rates than adjustable-rate mortgages, but they provide more stability, as the interest rate stays the same for the life of the loan. Adjustable-rate mortgages usually start out with lower interest rates but can go up or down depending on market conditions.

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What is interest rate?

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