What is the difference between APR and rate?
A measure of the cost of credit, expressed as a yearly rate. It is supposed to allow you to make an apples-to-apples comparison when shopping lenders. As Clay mentioned, it’s almost worthless these days especially since lenders can manually choose which fees to include in the calculation and because many understate fees. To add to the matter, I’ve been unable to obtain from HUD and the Federal Reserve Board any exact reference to exactly which fees are to be used in the calculation. You would think there’d be a mandated standardized list of the fees that are shared by everyone when calculating. Not for APR.
