Mortgage APR Calculator

Rate vs APR in one example

Take a $350,000 loan at 6.6% with $4,500 in fees and 1 point ($3,500): you sign for $350,000 but effectively receive $342,000 of value after $8,000 of upfront charges, while your payment is priced on the full balance. Spread over 30 years, those charges lift the true cost to an APR of about 6.86%. A rival lender offering 6.75% with almost no fees could show an APR near 6.77% — cheaper overall despite the 'higher' rate.

What APR includes — and what it leaves out

• Included: interest, points, origination and most lender fees, mortgage insurance, and many closing charges.
• Excluded: property taxes, homeowners insurance, and some third-party fees (title, appraisal in certain cases) — which is why APR comparisons only work between similar offers.
• Assumption trap: APR assumes you keep the loan the full term. Move in year seven and the fee-heavy loan's effective APR is much higher than disclosed.

How to use APR when shopping

Compare APRs only between offers collected the same day for the same loan type and term, then sanity-check with total-cost math in the comparison calculator. For an adjustable-rate loan, APR is nearly meaningless because it assumes the rate never changes after the fixed period. Curious what the points alone do? The points calculator finds their break-even month. And our rates guide explains how all these numbers get priced in the first place.