How Do You Calculate Mortgage APR Rate?
The annual percentage rate (APR) is the total cost that a borrower pays on a mortgage, which is expressed as a single percentage rate, according to Investopedia. When you get a mortgage, you receive two percentages: the mortgage interest rate and the APR. The mortgage interest rate is the rate used to calculate the monthly mortgage payment. The APR is the rate used to calculate the total cost of obtaining a mortgage, which takes into account the closing costs. The mortgage lender provides this figure to you, as required by federal law, but you should still understand how it is calculated. Calculate the monthly mortgage payment with closing costs. With a financial calculator, enter the interest rate and then hit the INT button, which stands for interest; enter the number of months for the mortgage term, then press N, for number of months; and enter the amount of the mortgage (including the closing costs), then press PV for present value. Then hit the PMT button, which stands for payment
