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What is the difference between the APY and the APR?

April 26, 2017Apr APY difference

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What is the difference between the APY and the APR?

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The APY (Annual Percentage Yield) is the annual interest used to calculate the interest paid over the life of your mortgage. The APR (Annual Percentage Rate) is defined as the total cost of credit. More simply put, the APR includes the costs of the loan spread out over the life of the mortgage. The APR was created to help consumers compare mortgage loans offered by various lenders.