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Interest Rate

The price of borrowing money, or the reward for saving it.

An interest rate is the percentage a lender charges to borrow money, or that a bank pays you to hold your savings. It is the price of money over time. Small differences matter enormously: on a long mortgage, a single percentage point can mean tens of thousands of dollars. Rates may be fixed for the life of a loan or variable, adjusting with market conditions.

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