The interest rate determines your monthly principal-and-interest payment. A small change has a big impact: on a $400,000 30-year loan, going from 6.5% to 7.0% adds about $130/month and $46,000 over the life of the loan.

Interest rates depend on your credit score, down payment, loan type, loan term, and broader market conditions (which are heavily influenced by Federal Reserve policy and the 10-year Treasury yield).

The interest rate is different from the APR — APR includes fees and gives a more complete cost-of-borrowing picture.