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What is the Annual Percentage Rate (APR) and how is it different from the interest rate?

April 26, 2017Annual Percentage Rate Apr different Interest rate

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What is the Annual Percentage Rate (APR) and how is it different from the interest rate?

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Your interest rate is the monthly cost you pay on the unpaid balance of your mortgage. The APR is calculated by taking the interest rate and adding the associated charges or costs of the mortgage (origination points, Private mortgage insurance, etc.) to reflect the total cost of the loan. By adding in all associated costs, the APR is a standardized measurement that allows borrowers to compare the cost of mortgage loans offered by different mortgage lenders.