Definition: The home mortgage rate refers to the annual interest rate charged by a lender for a specific type of loan (usually a mortgage), such as a 30-year fixed-rate home mortgage or a 15-year adjustable-rate home mortgage. The term 'home mortgage' typically includes both conventional and government-guaranteed mortgages. A 30-year fixed-rate home mortgage typically has an interest rate that is set at the beginning of the loan, based on the prime rate for the next four years (typically five years). A 15-year adjustable-rate home mortgage allows borrowers to pay more or less each month than the current market rate. The principal amount of a 30-year fixed-rate home mortgage stays constant while the interest rate changes every two years (usually once per year). The term 'home mortgage rate' is used interchangeably with both terms, depending on the context and the lender's policy. In some cases, the term 'rate' may be used in place of the word 'rate', indicating a variable interest rate that can adjust annually. For example, if a 30-year fixed-rate home mortgage has an annual interest rate of 5%, it would be referred to as a 30% loan rate. If a 15-year adjustable-rate home mortgage has an annual interest rate of 2%, it would also be referred to as a 15% loan rate, but the term 'rate' may be used in place of 'loan rate'.
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