What Is APR and How Does It Affect Your Mortgage? - NerdWallet
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Interest Rate vs. APR — What’s really in each? Interest Rate • The cost of borrowing the money • Based on market conditions, loan type, credit, and risk • Used to calculate your monthly principal & interest payment • Does NOT include lender fees or closing costs APR (Annual Percentage Rate) • The true yearly cost of the loan • Includes the interest rate plus: – Origination fees – Lender & processing fees – Discount points (if paid) • Usually higher than the interest rate 👉 Interest rate = month
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