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What decides where we will be reborn?

The most important factor, but not the only one, influencing where we will be reborn and what sort of life we shall have, is karma. The word karma means action and refers to our intentional mental actions. In other words, what we are is determined very much by how we have thought and acted in the past. Likewise, how we think and act now will influence how we will be in the future.
The gentle, loving type of person tends to be reborn in a heaven realm or as a human being who has a predominance of pleasant experiences. The anxious, worried or extremely cruel type of person tends to be reborn in a hell realm or as a human being who has a predominance of painful experiences. The person who develops obsessive craving, fierce longings, and burning ambitions that can never be satisfied tends to be reborn as a hungry ghost or as a human being frustrated by longing and wanting. Whatever mental habits are strongly developed in this life will continue in the next life. Most people, however, are reborn as human beings.