Annual Percentage Rate

If the interest rate answers “what am I being charged on the balance?,” APR answers “what does this credit cost when some of the upfront finance charges are pulled into a yearly rate?” Two loans can share an interest rate and still show different APRs. Fees included in APR can differ even when the note rate matches. This page does not use APR as shopping advice. A lower APR is not a recommendation to take a loan. Detailed computational rules are outside this canary.

The supported consumer idea is scope: APR is designed to reflect more than the interest rate alone because certain additional charges are included. Exact methodology is not part of this freeze.

Disclosures print both figures for a reason. Readers who treat them as synonyms will mis-rank products that differ mainly in fees, not in note rate.

Loan A and Loan B both carry the same interest rate. Loan A includes discount points; Loan B does not. Their APRs can diverge even though a rate quote sounded identical.

• Interest rate
• Total interest percentage

• Closing Disclosure
• Finance charge
• Higher-priced mortgage loan
• Interest rate
• Loan Estimate
• Truth in Lending Act

Related mortgage FAQ: What is the difference between a mortgage interest rate and APR?