APR (Annual Percentage Rate)
The true yearly cost of borrowing — interest plus most fees.
APR rolls the lender's interest rate together with most of the fees you pay (origination, points, mortgage insurance) into a single annual percentage. Two loans at the same nominal rate but different fees will have different APRs — APR is the comparison number lenders are required to disclose under the Truth in Lending Act.
Related
- Interest rate — The percentage charged annually for borrowing money.
- Discount points — Paying upfront cash to lower your interest rate.