Mortgage rates in New Hampshire: what sets your rate

What moves mortgage rates?

Mortgage rates follow the bond market. Most home loans are pooled and sold to investors as mortgage-backed securities, so when investors demand a higher return, lenders' rates rise, and when demand for bonds grows, rates tend to fall. Lenders reprice daily, and on busy market days more than once.

The Federal Reserve sets a short-term rate that banks charge each other. It doesn't set mortgage rates, which often move before a Fed decision or in a different direction afterward. Inflation reports, job numbers and the wider economy all feed into what investors expect.

Freddie Mac publishes a weekly national average every Thursday in its Primary Mortgage Market Survey. It's a good way to see the trend, but it isn't a quote for any one borrower.

Why is my rate different from the average I see online?

Averages and ads describe one sample borrower. Your rate is priced on your own loan, and these are the biggest factors:

• Credit score. Higher scores usually get better pricing.
• Down payment or equity. A larger down payment, or more equity when you refinance, lowers the lender's risk.
• Loan program. Conventional, FHA, VA, USDA and jumbo loans are each priced differently.
• Property and occupancy. Condos, 2 to 4 unit homes, second homes and investment properties are priced differently from a single-family home you live in.
• Loan term and type. A 15-year loan, a 30-year loan and an adjustable rate each carry their own rate.
• Points and lock length. Paying points buys a lower rate, and a longer rate lockRate lock A guarantee of your interest rate for a set period while your loan is processed, so market changes don't affect it. See the full glossary× can cost a little more.
• Cash-out. Taking cash out in a refinance is usually priced higher than a rate-and-term refinance.

On conventional loans, Fannie Mae and Freddie Mac publish loan-level price adjustments that add cost for combinations such as a lower credit score with a smaller down payment. Ads often assume excellent credit, a large down payment and points paid up front, which is why an advertised rate can look lower than your quote.

Are mortgage rates different in New Hampshire?

Rates are set in national markets, so New Hampshire rates track the national trend. What differs from one lender to the next is pricing: two lenders can quote the same borrower on the same day with different rates and fees.

In New Hampshire, much of your monthly payment isn't the rate at all. The state has no general sales tax and doesn't tax wages, so towns rely on property taxes, and those taxes can add hundreds of dollars a month. The NH property tax calculator shows your town's rate, and the payment calculator puts taxes, insurance and the loan together.

Should I compare the rate or the APR?

Both. The interest rate sets your monthly principal and interest. The annual percentage rate (APR) adds certain fees, such as points and origination charges, to show the yearly cost of the loan, so a low rate with high fees shows a higher APR.

APR assumes you keep the loan for its full term. If you expect to sell or refinance in a few years, the up-front fees matter more than the APR suggests, so look at both along with the dollar costs on the Loan Estimate.

Should I pay points to lower my rate?

Discount pointsDiscount points Optional fees paid at closing to lower your interest rate. One point equals 1% of the loan amount. See the full glossary× are fees paid at closing to lower your rate; one point equals 1% of the loan amount. Lender credits work the other way: you accept a higher rate and the lender pays part of your closing costs.

Points can pay off if you keep the loan long enough. Divide the cost of the points by the monthly savings to see how many months it takes to break even. A seller credit can also pay for points or a temporary buydown; the seller credits guide explains how.

How do I compare quotes the right way?

1. Compare the same loan. Same loan amount, program, term and lock length, so you're comparing price and not a different loan.
2. Compare on the same day. Rates change daily, so quotes from different days don't line up.
3. Use the Loan EstimateLoan Estimate A standard three-page form you receive within three business days of applying that shows your estimated rate, payment and costs. See the full glossary×. It's the standard form every lender must give you. Look at the rate, the points in section A and the total closing costs.
4. Don't worry about several credit checks. Credit scoring models count mortgage inquiries within a short shopping window as a single inquiry; the credit guide explains how.

A broker does much of this for you. Tom compares pricing from the 45 lenders Elite Mortgage Group works with for your exact scenario on the same day. Already have an offer? A free Loan Estimate second look shows whether another lender may do better.

How do I get my actual rate?

A real quote needs a few details: the price or home value, the loan amount, the town, the property type, how you'll use the home and an idea of your credit. Tom can talk through options with no credit pull to start, then price your loan exactly once you apply.

No rate is guaranteed until it's locked. The rate lock guide covers when to lock, how long a lock lasts and what can change a locked rate.