APR Calculator

APR (Annual Percentage Rate) includes the nominal interest rate plus all fees (origination, closing costs, points) expressed as an annual rate. It reflects the true cost of borrowing. A loan with 6% rate and $1,000 in fees has a higher APR than 6%.

APR typically includes origination fees, broker fees, points, and closing costs. For mortgages it also includes PMI. It excludes third-party fees like appraisals, title insurance, and prepaid items.

APR matters most for short-term loans where fees are a large share of the total cost. A 1% origination fee on a 30-year mortgage barely affects APR, but on a 2-year loan it significantly increases the true cost.

Credit card APR is the annual interest rate charged on balances. Unlike loan APR, it typically does not include fees. Cards may have multiple APRs for purchases, balance transfers, and cash advances.

Always compare the APR, not just the interest rate, when shopping for loans. A lower rate with high fees can cost more than a slightly higher rate with no fees. Use APR as your primary comparison metric.