Mortgage APR Calculator
Discover the true cost of your mortgage by calculating the Annual Percentage Rate (APR) including closing costs, discount points, and lender fees. Compare advertised rates against actual APR to make informed borrowing decisions.
| Loan Amount | — |
| Total Fees (included in APR) | — |
| Net Loan Proceeds | — |
| Total Cost of Loan | — |
| Total Payments (principal + interest) | — |
How Mortgage APR Works
The Annual Percentage Rate (APR) represents the true yearly cost of borrowing, mandated by the Consumer Financial Protection Bureau (CFPB) under the Truth in Lending Act (TILA). While lenders advertise attractive interest rates, the APR reveals what you actually pay once closing costs, discount points, and origination fees are factored in. Based on CFPB Regulation Z disclosure requirements, this calculator uses Newton-Raphson iteration to solve for the rate that equates all payment cash flows to your net loan proceeds.
APR vs Interest Rate — Why It Matters
Two mortgage offers might both advertise 6.5% interest, but if one charges $8,000 in fees and the other $3,000, their APRs will differ significantly. The APR levels the playing field by spreading all upfront costs across the loan term, giving you a single number to compare. A larger gap between advertised rate and APR means higher relative fees. For a $300,000 loan, even a 0.25% APR difference translates to roughly $15,000 in extra cost over 30 years. Last updated: 2026.
What Fees Are Included in APR Calculations
Per CFPB guidelines, mortgage APR must include: origination fees, discount points, mortgage broker fees, and prepaid interest. Items typically excluded are title insurance, appraisal fees, credit report fees, and home inspection costs. This calculator lets you include any combination of fees to see their impact on your true borrowing cost. The more fees rolled into the APR calculation, the higher it climbs above the nominal rate.
Tips for Comparing Mortgage APR Offers
When shopping for mortgages, compare APRs across loans with the same term length — a 15-year APR cannot be directly compared to a 30-year APR. Request Loan Estimates from at least three lenders within a 14-day window (which counts as a single credit inquiry). Pay attention to whether a lower rate comes with higher points, as the break-even period may exceed your planned ownership. If you plan to sell within 5-7 years, a no-points higher-rate loan often costs less total than a points-heavy lower-rate loan.