# rate vs apr on mortgage loan

They might be used interchangeably, but an APR and an interest rate aren’t one and the same. The annual percentage rate represents your total cost of getting a mortgage. The interest rate represents the cost you pay over time to buy that loan. Let’s take a look at the difference between your APR.

Mortgage interest rates vs. APR. The annual percentage rate (apr) represents the true yearly cost of your loan. It includes the actual interest you pay to the lender, plus any fees or costs. That’s why a mortgage APR is typically higher than the interest rate – and why it’s such an important number when comparing loan offers.

But he says that trend is set to reverse if mortgage rates begin to creep higher. When you’re ready to crunch the numbers to make a decision, Bank of America’s Schleck says the first step is to pull.

Summary – APR vs Note Rate. The difference between APR and Note Rate is dependent on which costs are taken into consideration in its calculation. Due to the inclusion of total cost, use of APR is more beneficial than Note Rate. It also allows effective comparison of rates than the Note Rate.

Looking for home mortgage rates in Missouri? View loan interest rates from local banks, MO credit unions and brokers, from Bankrate.com.

http://usbank.com/mortgage Both are important, but they mean two different things when it comes to your mortgage loan.

The APR (Annual Percentage Rate) is something different and – curiously – a number. Is the loan priced at 4.75 percent or 4.847 percent?

Mortgage Rate X: 4.50%, 4.838% APR Mortgage Rate Y: 4.75%, 4.836% APR . The advertised mortgage rate "X" is 4.50%, but requires that two mortgage points be paid – it also has \$2,000 in additional closing costs, which pushes the APR to 4.838%. Meanwhile, advertised mortgage rate "Y" is offered with no points and just \$1,000 in closing costs, so the APR is 4.836%, just below that of mortgage rate "X."

The mortgage APR calculator will help you to determine the annual percentage rate (APR) that you will be charged on your mortgage.