Which financial factor typically affects mortgage interest rates?

Mortgage interest rates are primarily influenced by the overall market demand for loans. When there is high demand for mortgages, lenders can increase interest rates as more borrowers compete for available funds. Conversely, if demand decreases, lenders may lower rates to attract more customers. This relationship between demand and interest rates is a fundamental concept in economics, often reflecting broader economic conditions.

The other options listed, while they may have some impact on aspects of mortgage lending, do not directly affect the general interest rate environment in the same way. For instance, the age of a property may influence its market value or the risk associated with it but does not directly sway how lenders set interest rates across the board. Borrower's income level can affect individual loan approvals and terms, but it does not encapsulate the overarching demand dynamics influencing interest rate adjustments. Similarly, the type of insurance policy is more related to risk management for lenders rather than the economic factors driving interest rate changes.