Mortgage APR Calculator
Compare your mortgage interest rate with the real annual cost of borrowing.
The True Cost Lens
Mortgage APR Calculator
Look past the advertised interest rate to see the real annual cost of borrowing, including upfront fees and points.
The Base Loan
Finance Charges (Upfront Costs)
Advertised Rate
True APR
The APR Spread
Why is the APR higher?
The advertised rate only dictates your principal and interest payment of $1,799. However, because you are paying $6,000 in upfront finance charges, the actual "net money" you get to use is only $294,000.
Paying $1,799/mo to borrow $294,000 over 30 years equates to an effective annual interest rate (APR) of 6.189%.
See the True Loan Cost
A low interest rate does not always mean the cheapest mortgage.
A Mortgage APR Calculator helps you compare the interest rate, lender fees, points, and other loan costs in one number, so you can see what the loan may really cost each year.
APR Meaning
APR stands for Annual Percentage Rate.
It includes the interest rate plus certain loan costs, which makes it useful for comparing mortgage offers side by side.
Rate vs APR
The interest rate affects your monthly principal and interest payment.
APR gives a wider view by including extra borrowing costs. If two loans have the same rate but different fees, the APR can show which one may cost more.
Points and Fees
Points and lender fees can raise the APR.
A loan with a lower rate may still have a higher APR if the upfront costs are large. This is why APR is useful when comparing lender offers.
Break-Even View
APR is helpful, but it should not be the only number.
If you plan to sell or refinance soon, high upfront costs may not be worth it, even if the APR looks competitive over the full loan term.
Key Inputs
For a better estimate, enter:
- Loan amount
- Interest rate
- Loan term
- Lender fees
- Discount points
- Origination charges
- Closing costs
- Mortgage insurance
- Time kept
Smart Compare
Use the calculator to compare:
- Lower rate vs. higher fees
- No-points vs. points option
- Short-term vs. long-term savings
- APR across lender offers
- Monthly payment vs. total cost
APR Planning Note
A Mortgage APR Calculator helps you look beyond the advertised rate. By comparing APR, monthly payment, fees, points, and how long you plan to keep the loan, you can choose the mortgage offer that gives the better real value.
Quick Answers
What is the difference between Interest Rate and APR?
The interest rate is the cost to borrow the principal loan amount. The APR (Annual Percentage Rate) includes the interest rate PLUS other costs like lender fees, discount points, and origination charges. APR gives you the true annual cost of borrowing.
Why is the APR always higher than the interest rate?
Because the APR factors in upfront finance charges. You are paying these fees to get the loan, which means the 'net' amount of money you actually get to use is lower, making your effective borrowing cost (APR) higher.
Should I always choose the loan with the lowest APR?
Not necessarily. If a loan has a low APR but high upfront fees (like buying points), it may take years to break even. If you plan to sell or refinance soon, a loan with fewer upfront fees might be better, even if the APR is slightly higher.
What fees are included in the APR?
APR typically includes origination fees, discount points, underwriting fees, processing fees, and sometimes mortgage insurance. It generally does NOT include third-party fees like appraisals, title insurance, or home inspections.