Mortgage Basics

What Is APR?

How annual percentage rate differs from your interest rate — and why both matter.

4 min readUpdated 2026Mortgage Basics

APR vs interest rate

Your interest rate is what accrues on the balance. APR includes the rate plus most lender fees, expressed as an annualized cost of the loan.

Where APR helps and where it doesn't

APR is useful for comparing similar-term fixed loans from different lenders. It can be misleading on ARMs or short-hold refinances.

Key takeaways

  • Compare rate AND APR when shopping.

Frequently asked questions

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