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Of the many different variables that can affect your mortgage rate. One of the most important is a direct reflection of your financial habits. Banks and other institutions have many means of ranking potential customers, though the most popular is based on a numeric value aggregated by the Fair Isaac Corporation. The FICO score is based on a aggregate of five different factors: payment history, credit utilization, length of credit history, types of credit used, recent searches for credit. These are weighted and converted into a numeric value from 300-850. To get a market rate mortgage, it is important to have as high a number as possible. Lenders want to reduce their risk as much as possible so they will require larger payments, or even deny those who have a history of bad credit. Mortgage rates also can vary depending on the type of loan a home buyer decides on. For example, an adjustable rate mortgage, or ARM, is named for its changing interest payments that are connected to a specific index, such as the interest rates of United States treasury bills. If these rates are low at the time of closing, one may be subject to a much lower payments than that of a typical mortgage. In a regular mortgage, the buyer will take on an interest rate that does not change over the course of the loan. Always remember, when searching for a loan, the payment will probably only change based on the interest. The actual amount you wish to borrow, the principal will stay as this is what is needed to pay the seller and occupy the home.