Understand the differences between the interest rate and the APR when comparing mortgages so you can avoid overpaying for a home loan.
What is the Interest Rate?
The interest rate is the amount the lender will charge, based on market rates when you take out a mortgage and your credit score, in exchange for loaning you the principal amount.
What is the APR?
The annual percentage rate (APR) includes the interest rate, as well as other costs, such as loan origination fees, closing costs, mortgage insurance and discount points.
Which Mortgage is Best?
The interest rate can help you figure out how much you would pay each month, while the APR can give you an idea of how much you would pay over the life of the mortgage.
An online mortgage calculator can help you compare loan offers and figure out which loan would be the best option for you.
Get Professional Advice
A mortgage broker can explain your options and help you find a loan with competitive terms.