The interest rate is the percentage your lender charges you for borrowing the principal balance of your mortgage. It's used to calculate your monthly principal-and-interest payment, but it does not include fees, points, or mortgage insurance.
Mortgage interest rates can be fixed (locked for the life of the loan) or adjustable (tied to an index like SOFR and reset on a schedule). Fixed-rate loans give predictability; ARMs typically start lower and reset higher over time.
Don't shop by interest rate alone — a lender can quote a low rate while charging high points. Compare APR alongside the rate, and always ask for a Loan Estimate so you see the full picture.