Mortgage companies in Maryland offer many mortgage choices to customers. 30-year fixed, 15-year fixed, 1 year ARM, 3/1 ARM, 5/1 ARM, 5-year balloon, 7-year balloon, 3-year fixed Jumbo, 15-year fixed Jumbo, or a 1-year ARM Jumbo, 3/1 ARM Jumbo and 5/1 ARM Jumbo to name a few. One of the key differences in these mortgages is the rate of interest. Mortgages can be basically classified as fixed and adjustable rate mortgages. Fixed rate mortgages have a fixed rate of interest, whereas the ARMs have adjustable interest rates that keep fluctuating according to market conditions. ARM's rates vary based on the one-year Treasury Security rate, the 6-month Certificate of Deposit (CD) rate, or the Federal Home Loan Bank's 11th District Cost of Funds Index (COFI). You can go for a fixed rate mortgage, if the current rate is really low. An adjustable rate mortgage is ideal if the interest rates are expected to come down in a few years time. You can also refinance your current FRM and convert it to an ARM if the interest rates do come down. There are also mortgages with a "rate-lock period."

Mortgage interest rates are determined by the dynamics of the investments and bonds markets. The mortgages are bundled up and scrutinized into bonds known as mortgage-backed securities or mortgage bonds. These bonds are traded in the markets like stocks, at different prices. The price movements of these bonds determine the interest rates on the mortgages. Countries like Japan, Korea and China that have huge dollar reserves that they need to invest somewhere generally trade these bonds. Hence, the movements in this securities market, as well as the mortgage interest rates are determined by international business conditions.

When you look up the mortgage rates, the current rate along with the APR (annual percentage rate) is also given. This APR represents the true cost of the loan, including fees and upfront costs. APR is generally used to compare the various kinds of loans.

Maryland Mortgage rates are almost on par with other states' rates. The rates for 30-year fixed, 15-year fixed and 1-year ARM are 6.30%, 5.80% and 5.01% respectively while the 3/1, 5/1, 7/1 an 10/1 ARMs have rates of 5.82%, 5.90%, 6.07% and 6.18% respectively. These rates differ from one lending company to another.