What is the difference between mortgage interest rate and APR?

Use both figures for different questions

The note rate helps determine interest charged on the balance. APR helps show the effect of certain borrowing costs. It is not the same as the total housing payment and does not replace reviewing individual fees. CFPB — Interest rate and APR ↗

Keep comparison assumptions aligned

Ask for written estimates with the same loan amount, loan type, term, and lock assumptions. Compare points and credits alongside the rate and APR. When products have different features, ask the lender to explain how those differences affect the comparison.

Bring the decision back to your timeline

An upfront charge may be worthwhile for one holding period and unsuitable for another. Review cash to close, monthly payment, and expected balance together. The simple payment calculators on this site do not calculate a disclosed APR.

Put it into perspective

An example, not an offer

Illustration only: two $400,000 loans may have different upfront charges even when their stated interest rates match. A $4,000 fee difference is cash you should compare explicitly; this example does not calculate either loan’s APR.

Related questions

• How do mortgage points and lender credits work?
• What closing costs should I budget for a Washington home purchase?
• Is an online mortgage quote a rate lock?

Check the original guidance

• CFPB — Interest rate and APR ↗

Requirements and availability can change. Confirm the program and lender terms for your application.