What is APR?
APR, which stands for annual percentage rate, refers to the interest rate for the life of the loan, rather than just a monthly fee/rate and includes any fees paid directly to the lender and any prepaid interest charges.
When calculating APR, fees such as Private Mortgage Insurance, processing, and discount points are added to the total amount of the monthly payments for the entire term of the loan. You will often see mortgage interest rates quoted as both a rate (5.125%) and as an APR such as (5.375%). Since these rates can vary, it is important to thoroughly review your loan type, rate and closing costs with each lender that you are considering for your mortgage.