Federal Funds Rate
Lending & MortgagesThe interest rate at which banks lend reserves to each other overnight, set by the Federal Reserve and influencing all other rates.
Example
Example: Suppose you take out a $300,000 30-year fixed mortgage at 6.5%. Understanding federal funds rate helps you see how your monthly payment of approximately $1,896 is structured — and how this concept affects your total cost over the life of the loan. Use our mortgage calculator to see how federal funds rate impacts your specific situation.