MortgageComparisonTools

Mortgage APR Calculator

Convert a rate plus fees and points into an APR, and see how much of the true cost the nominal rate leaves out.

Last reviewed

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Free · No sign-up · Runs in your browser

The interest rate is what a lender advertises and the APR is what the loan costs, and the difference between them is the fees. On a mortgage with points and an origination charge, the gap is regularly half a percentage point or more.

This calculator solves for the APR implied by a rate plus the fees you enter, and reports the premium over the nominal rate so the cost of those fees is visible as a rate rather than as a lump sum.

Your numbers

Results update as you type. Nothing is sent anywhere.

Result

APR

5.91%

APR above the nominal rate

0.16%

Nominal rate
5.75%
Total fees
$5,500
Cost of points
$3,200
Amount financed
$314,500
Monthly payment
$1,867
Total interest
$352,275

APR spreads the up-front fees across the full term. Paying the loan off early makes the true cost of those fees higher than the APR suggests.

Comparing two offers by APR only works when both use the same term and the same fee set.

How to use the mortgage apr calculator

  1. Enter the loan amount, the nominal rate and the term.
  2. Enter the origination fee and any other lender charges.
  3. Enter discount points as a percentage of the loan.
  4. Compare the APR against the nominal rate to see what the fees cost.

What people use this for

  • Comparing a low-rate loan with fees against a higher-rate loan without.
  • Understanding what a lender’s disclosed APR is telling you.
  • Pricing the effect of buying points.
  • Checking whether a "no closing cost" offer is genuinely cheaper.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

One point plus an origination fee

$320,000 at 5.75% over 30 years with a $1,400 origination fee, 1 point, and $900 of other charges.

APR
5.91%
APR above the nominal rate
0.16%
Total fees
$5,500

A no-fee loan at a higher rate

The same loan at 6.15% with no fees at all.

APR
6.15%
Monthly payment
$1,950
Total interest
$381,831

What APR does and does not tell you

APR spreads up-front costs across the full term, expressing them as an addition to the rate. It makes two offers with the same term and comparable fee sets directly comparable, which is exactly what it was designed for.

What it cannot handle is a difference in term, or a difference in which fees each lender includes. Two APRs computed on different fee sets are not comparable, and lenders do not all include the same items.

APR assumes you keep the loan

Spreading a $5,000 fee across thirty years produces a small addition to the rate. Spreading it across the five years most people actually keep a mortgage produces a much larger one.

That is the practical limitation of APR: it systematically understates the cost of up-front fees for anyone who moves or refinances, which is most borrowers. If you expect to be there under ten years, compare the fee in cash terms as well.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • The payment is computed from the nominal rate and term. APR is the rate that equates that payment stream to the loan amount net of fees, solved by bisection.
  • Points are a percentage of the loan amount and are added to the fee total.
  • Which fees a lender includes in a disclosed APR varies; this includes exactly what you enter.
  • Results are estimates. Real quotes depend on credit, income, property, loan programme and lender pricing at the time of application.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator is provided for informational and educational purposes only. Results are estimates and may not reflect actual rates, fees, taxes, or market conditions.

This website is not a lender, a mortgage broker or a financial adviser. It does not originate loans, does not accept applications and does not forward your details to anyone.

Actual loan terms depend on credit history, income, the property, the loan programme and lender pricing at the time of application. Only a lender can tell you what you qualify for.

Frequently asked questions

Why is APR higher than the interest rate?

Because it includes the fees. If there are no fees, the two are effectively the same figure.

Are all fees included in APR?

Not necessarily. Lenders include finance charges as defined by regulation, and third-party costs are treated differently. Two disclosed APRs are only comparable if the fee sets match.

Is the lowest APR always the best loan?

Only for a borrower keeping the loan to term. Someone likely to move within a few years is often better off with higher rate and lower fees despite the worse APR.

Does APR work for adjustable-rate loans?

Disclosed APRs on adjustable loans rely on assumptions about future rates. This calculator models a fixed rate only.

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