The interest rate helps determine the interest charged on your loan balance. Annual percentage rate, or APR, adds certain financing costs to express a broader annualized borrowing cost. Read both alongside the payment, fees and cash needed at closing.
Use APR with the written costs and terms, not as a stand-alone ranking.
Find both numbers on the Loan Estimate
On an official Loan Estimate, the interest rate appears on page 1 under Loan Terms. APR appears on page 3 under Comparisons. A preliminary fee worksheet may also show an estimated APR. Check whether the professional calculated it using complete charges and the actual loan terms.
Understand what APR includes
APR incorporates the interest rate plus charges such as points, mortgage broker fees and certain other borrowing costs. It does not mean every dollar needed at closing is a financing charge. Ask for the itemized costs and compare cash to close separately.
Compare the same kind of loan
Keep the loan amount, term, product and lock assumptions consistent. An ARM’s APR does not show its maximum possible rate. A HELOC’s APR does not include fees in the same way as a closed-end mortgage APR. A lower number across these different products does not settle which loan costs less for your situation.
Add your time horizon
Ask for costs and remaining balances at the date you expect to move or refinance. APR alone does not tell you whether an upfront charge pays off over that shorter period. If one quote has points and another has lender credits, request alternatives using the same rate or upfront-cost target.
Explore private mortgage shopping
Use the free tools to prepare your scenario, then check Quote Your Way for eligible originators and request availability. Review how sharing a scenario differs from choosing a professional to contact you.
Compare mortgage quotes with contact choices you control →See the cost over three and seven years
Our fictional comparison shows how paying points can change monthly payments and interest costs at different holding periods, including the remaining loan balance.
See the worked mortgage quote example →Your action list
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Check the local details
Find your state guide for county loan limits and official housing resources, or review the complete mortgage-shopping checklist.
Keep learning from the source
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CFPB: Understanding your Loan Estimate ↗CFPB: mortgage interest rate and APR ↗CFPB: Points and lender credits ↗General education, not an approval or personalized recommendation. Loan terms and eligibility vary. Our editorial standards.