Example: 

For example, if you borrow $200,000 at an interest rate of 5%, you will pay $10,000 in interest over the life of the loan. 

There are two main types of interest rates: fixed-rate and variable-rate.

• Fixed-rate: With a fixed-rate loan, the interest rate will stay the same for the life of the loan. This can be helpful for budgeting, as you will know exactly how much interest you will pay each month.

• Variable-rate: With a variable-rate loan, the interest rate will change over time. This is because the interest rate is usually tied to an underlying index, such as the prime rate. If the index goes up, the interest rate on your loan will go up, and your monthly payments will increase.