Interest rates for mortgages are determined by the overall economy, based on what return other potential investments would yield. The bottom line is that someone eill only invest in a mortgage (the investor ultimately loaning you the money) if the reward(return) is seen as being equal or greater that that possible for anther investment of equal risk. Typically, when the economy is strong and growing, many companies are expanding and using money to do so. The demand for money is high, so lenders can change more. This drives up the interest rate.