APR (Annual Percentage Rate)
Lending & MortgagesThe total yearly cost of borrowing including interest and fees, expressed as a percentage.
Example
Example: A mortgage advertises 6.5% interest but has $8,000 in closing costs. The APR — which includes those costs spread over the loan life — is 6.72%. Another lender offers 6.625% with $4,000 in costs, for an APR of 6.73%. Despite the higher rate, the second loan costs almost the same. Always compare APR, not just the interest rate. Use our APR calculator.