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What is the difference between A.P.R. and interest rate?

April 26, 2017Interest rate

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What is the difference between A.P.R. and interest rate?

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The APR reflects the cost of your mortgage loan as a yearly rate. It also incorporates the cost to obtain the loan, such as discount fees and loan origination fee. The interest rate is the actual note rate.

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The interest rate is the percentage of an amount of money which is paid for its use for a specified time. The APR is the interest rate which reflects the true cost of borrowing in percentage terms. This rate is usually higher than the stated loan rate because it takes into account the total cost of borrowing including points and other charges.

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