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Mortgage Rate vs APR: What You Need to Know

One of the questions that many homebuyers have when applying for a mortgage is the difference between mortgage rates and the annual percentage rate (APR).

Mortgage rates are the interest that buyers will pay on their loan. Meanwhile, the APR is the mortgage rate plus the other fees and charges incurred in getting that loan.

That’s why the APR is generally higher than the mortgage rate on a loan.

“The APR is the cost that is associated with you being able to get that mortgage rate,” said Ken Smith, a sales manager at New American Funding based in Evans, Ga.

Ken Smith NMLS # 1693047