Which two factors are key in determining a borrower's interest rate?

The two key factors in determining a borrower's interest rate are the credit score and the loan-to-value (LTV) ratio.

A credit score is crucial because it reflects the borrower's creditworthiness and ability to repay debts. Lenders typically evaluate the credit score to assess the risk associated with lending to a particular borrower. Higher credit scores usually correlate with lower interest rates, as these borrowers are perceived as less risky.

The loan-to-value ratio, which compares the loan amount to the appraised value of the property, also plays an important role. A lower LTV ratio indicates that the borrower is investing more of their own money into the property, which can reduce the lender's risk. Consequently, borrowers with a lower LTV may qualify for more favorable interest rates, as they represent a smaller proportion of the property's value.

Other factors like income level, employment status, or property location can influence the overall lending decision and affect terms of the loan, but they do not directly dictate the interest rate as significantly as credit score and loan-to-value ratio.