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What is the difference between my annual percentage rate (APR) and actual interest rate?

April 26, 2017actual Annual Percentage Rate Apr Interest rate

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What is the difference between my annual percentage rate (APR) and actual interest rate?

1 Answer

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10 Posted

There are two interest rates that apply to your loan; your Actual Interest Rate and Annual Percentage Rate (APR). The Actual Interest Rate is the annual interest rate of your loan (Also called “note rate”), and is the interest rate used to calculate your monthly payments. Your Annual Percentage Rate (APR) encompasses both your interest rate and any other additional costs or prepaid finance charges you may pay such as prepaid interest (necessary to adjust your first payment if you close mid-month), private mortgage insurance, closing fees, points etc.