What is an Annual Percentage Rate (APR)?
Annual Percentage Rate (APR)
Definition of an Annual Percentage Rate (APR)
APR is a number representing the total cost of a buyer’s loan as a percentage, allowing a buyer to compare the total costs of a loan when making mortgage loan decisions. APR is the total cost of an interest rate and associated fees and rebates, all over the life of a mortgage, and expresses the total cost in a percentage form. Because a loan with a lower APR might not always be the best deal, a buyer should evaluate the entire cost of the loan over the time he plans to own the home. When evaluating total loan cost, APR is a good starting place. A lender will estimate all of the costs associated with a loan, and the APR, and report it out as a Loan Estimate.