The annual percentage rate (APR) and interest rate are two critical metrics affecting the cost of borrowing money. Although both figures are related, knowing the difference between interest rates and APR is vital when comparing mortgage offers. For example, learning how APR is calculated could save you thousands of dollars on your home loan. 

APR versus interest rate gets confusing because some people use the terms interchangeably. Also, some mortgage lenders prominently display their loan interest rates — usually because the interest rates are lower than the annual percentage rate. So typically, you must hunt for the APR in the small print of loan terms. 

What’s the deal with calculating interest rates and APRs? How can you decipher these figures to determine the actual cost of your mortgage? What is a good APR for loans when comparing mortgage rates? 

This article helps you know how to compare lender fees to get the best deal on your mortgage. 

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