Mortgage APR Calculator - Calculate Real APR with PMI, Points & Fees

What Is APR (Annual Percentage Rate)?

The Annual Percentage Rate (APR) represents the total yearly cost of your mortgage, including not just the interest rate, but also additional fees and costs associated with obtaining the loan. Unlike the simple interest rate, APR provides a more complete picture of what you'll actually pay for your mortgage.

The APR includes:

• Base interest rate
• Mortgage points (discount points)
• Origination fees
• Private Mortgage Insurance (PMI)
• Processing fees
• Underwriting fees
• Other closing costs that are financed

What Does a 25.99% APR Mean?

At a 25.99% APR, the interest accumulating on balances or loans will add up quickly, making it costly to carry balances or borrow. It's wise to pay down any balances quickly if you have a rate this high to minimize interest charges.

If the Home Price Is $400,000, With a 30-year Loan Term, 20% Down, a Fixed Rate of 6.5%, and Loan Fees of $2,000, What'S the Real APR?

The real APR (including $2,000 loan fees) is approximately 6.923%, higher than the nominal 6.5% fixed interest rate due to the upfront fees reducing the net proceeds.

References

Government Resources:

• Consumer Financial Protection Bureau (CFPB) - APR vs Interest Rate
• U.S. Department of Housing and Urban Development - Home Buying
• Federal Housing Finance Agency - Mortgage Information
• VA.gov - Home Loans
• USDA.gov - Rural Development Loans

Regulatory Information:

• Truth in Lending Act (TILA) - Federal Regulations
• FDIC - Mortgage Information

Educational Resources:

• MyMoney.gov - Home and Mortgage
• Federal Trade Commission Consumer Information on Mortgages