APR Calculator
The interest rate is what the lender advertises. APR is what you actually pay. Enter your loan details and fees to see the true Annual Percentage Rate and compare offers accurately.
What you'll need
- Loan amount (principal)
- Quoted interest rate
- Loan term
- Origination / underwriting fee
- Discount points (if any)
- Other prepaid finance charges (broker fees, upfront MIP)
What you'll get
True APR
Rate including all fees
Fee impact
How much fees add to your rate
Total borrowing cost
Interest + fees over the loan
Spread analysis
Healthy vs high fee signal
How It Works
Enter loan details
Provide the loan amount, interest rate, loan term, and closing costs.
Add lender fees
Include origination fees, discount points, mortgage insurance, and broker fees.
Get your true APR
See the annual percentage rate that includes all financing costs for comparison.
APR vs Interest Rate: $300,000 Loan
| Scenario | Interest Rate | Closing Costs | APR |
|---|---|---|---|
| No-fee loan | 7.00% | $0 | 7.00% |
| 1 point discount | 6.50% | $3,000 | 6.73% |
| 2 points + fees | 6.00% | $9,000 | 6.39% |
| High-fee lender | 6.75% | $8,000 | 7.14% |
Lower APR = better deal overall. Compare APR, not just the interest rate.
Frequently asked questions
Why is the APR always higher than the interest rate?
APR includes fees that the interest rate doesn't — origination fees, discount points, mortgage broker fees, upfront mortgage insurance, and prepaid interest charges. APR spreads these upfront costs across the entire loan term. For example, $5,000 in fees on a $320K, 30-year loan adds about 0.15% to APR. Rate equals APR only if there are zero prepaid finance charges, which is extremely rare.
How do I compare two loan offers using APR?
Lower APR equals lower total cost over the full loan term. However, APR assumes you keep the loan for 30 years. If you sell or refi in 7 years, a higher-rate, lower-fee loan may actually be cheaper. Always compare both APR and total closing costs, and factor in how long you'll actually keep the loan.
What fees are NOT included in APR?
APR excludes title insurance, appraisal fees, home inspection, survey costs, attorney fees, recording fees, prepaid property taxes and insurance, and HOA transfer fees. It includes origination fees, discount points, mortgage broker fees, upfront mortgage insurance (FHA MIP, VA funding fee), and prepaid interest. Two loans with the same APR can have different total closing costs.
What is a typical spread between rate and APR?
A healthy APR spread is 0.1–0.3% above the interest rate. Over 0.5% signals high fees — investigate what's included. For example, 6.75% rate with 7.05% APR is normal. 6.75% rate with 7.50% APR means you're paying a lot in fees. The bigger the fee, the bigger the spread.
Ready to see your true borrowing cost?
Calculate True APR →